Calculate the market value capital structure and WACC.

Titan Mining Corporation has 8.5 million shares of common stock outstanding, 250,000 shares of 5 percent preferred stock outstanding, and 135,000 7.5 percent semiannual bonds outstanding, par value $1,000 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 maturity and sell for 114 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 4 percent, and Titan Mining's tax rate is 35 percent.

Debt Bonds Outstanding - 135,000 Settlement Date - 01/01/00 Maturity Date - 01/01/15 Annual Coupon Rate - 7.50% Coupons per year - 2 Bond price (% of par) - 114 Par value ($) - $1,000

Common Stock Shares Outstanding - 8,500,000 Beta - 1.25 Share price - $34

Preferred Stock Outstanding Shares outstanding - 250,000 Coupon rate - 5.00% Share price - $91 Par value ($) - $100

Market Market risk premium - 7.50% Risk-free rate - 4.00% Tax rate - 35%

What is the firm's market value capital structure?

Market value of debt Market value of equity Market value of preferred Market value of firm

Weight of debt Weight of equity Weight of preferred

What is the firm's weighted average cost of capital, or WACC?

Pretax cost of debt Aftertax cost of debt

Cost of equity

Cost of preferred

WACC