Lingenburger Cheese Corporation has 6.4 million shares of common stock outstanding, 200,000 shares of 3.8 percent preferred stock outstanding, par value of $100, and 120,000 bonds with a semiannual coupon of 4.8 percent outstanding, par value $1,000 each. The common stock currently sells for $54 per share and has a beta of 1.08, the preferred stock currently sells for $103 per share, and the bonds have 15 years to maturity and sell for 107 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 2.4 percent, and the companys tax rate is 22 percent. What is the firms market value capital structure? If the company is evaluating a new investment project that has the same risk as the firms typical project, what rate should the firm use to discount the projects cash flows?

with excel functions

\begin{tabular}{|lr|} \hline Debt & \\ \hline Bonds outstanding & 120,000 \\ Settlement date & 1/1/2020 \\ \hline Maturity date & 1/1/2045 \\ Annual coupon rate & 4.80% \\ Coupons per year & 107 \\ \hline Bond price (\% of par) & 100 \\ \hline Redemption (\% of par) & $1,000 \\ \hline Par value (\$) & 1.08 \\ Common stock & $54 \\ Shares outstanding & \\ Beta & 200,000 \\ Share price & 3.80% \\ Preferred stock outstonding & $100 \\ Shares outstanding & $103 \\ Coupon rate & 2.40% \\ Par value & 22% \\ \hline Share price & \\ Market & \\ Market risk premium & \\ Risk-free rate & \\ Tax rate & \\ \hline \end{tabular} Output Area: 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 Pretax cost of debt Aftertax cost of debt Cost of equity Cost of preferred Discount rate for new project