Bombay Inc has 8.5 million shares of common stock outstanding, 250,000 shares of 5% preferred stock outstanding, and 135,000 7.5% semi-annual bonds outstanding, par value $1000 EACH. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 114% of par. The market risk premium is 7.5%, T-bills are yielding 4%, and the companys tax rate is 35%.

Question- If Bombay Inc generates a 7.5% with this capital, is Bombay Inc destroying or adding value discuss.