ABCD company has the following book-value based Balance Sheet:
Total Assets	$ 1,000,000	8% Debt	$ 400,000
		9% Preference Share	$ 100,000
		Equity	$ 500,000
Total Assets	$ 1,000,000	Total Liabilities and equities	$ 1,000,000
The bond has a par value of $1000, will mature in 5 years, and has YTM of:				6%
The preference share which has a par value of $100 is currently trading at:				$ 125.00
There are 100,000 common shares outstanding and market price per share is:				$75
The risk-free rate is 4%, market return is:				12%
Beta of the ABCD stock is:				1.25
Corporate tax-rate is:				40%
a. Find the market value of each type of capital. [6 marks]
b. Compute the market value based weights for each source of capital. [6 marks]
c. Compute the Weighted Average Cost of Capital (WACC). [6 marks]
d. If the company is evaluating a new investment proposal which is in the similar risk class as the company, what should be the hurdle rate? [2 marks]