Figure 9-1 MicroDrive, Inc.: Selected Capital Structure Data (Millions of Dollars, December 31, 2016) Investor Supplied Capital Book Market Percent Market Percent of Total Value of Total Book Value Target Capital Structure Watu 2% $ 200 280 300 $ 780 1,200 $1,980 Wa= Liabilities and Equity Accounts payable Notes payable Accruals Total C.L. Long-term debt Total liabilities Preferred stock Common stock Retained earnings Total common equity Total L&E 28% W = 100 500 3% 970 w = $1,470 $3,550 67% 100% Other Data (Millions, except per share data): Number of common shares outstanding = Price per share of common stock = Number of preferred shares outstanding - Price per share of preferred stock = 50 $25.00 $103.00 Additional Assumptions: (1) MirocDrive has four sources of capital that need to be handled individually. They are short-term debt, long-term debt, preferred stock, and common stock. Assume a tax rate of 40%. (2) MicroDrive has notes payable with an interest rate of 10%. (3) MicroDrive has outstanding bonds with a 9% annual coupon, 15 years until maturity, and a face value of $1,000. The bonds make semiannual coupon payments and are currently trading at the market price of $975. There are 1.2 million individual bond certificates outstanding. (4) The firm's preferred dividend is $8.00 and is trading at $103.00. (5) Yield on 10-year T-Bond is 2.10%, average market return is 9.60%, and the firm's beta is 1.43