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Lingenburger Cheese Corporation has 6.6 million shares of common stock outstanding, 324,000 shares of 4.75 percent preferred stock outstanding, par value of $100, and 77,0005.4
Lingenburger Cheese Corporation has 6.6 million shares of common stock outstanding, 324,000 shares of 4.75 percent preferred stock outstanding, par value of $100, and 77,0005.4 percent semiannual bonds outstanding, par value $2,000 each. The common stock currently sells for $74.55 per share and has a beta of 1.12 , the preferred stock currently sells for $102.00 per share, and the bonds have 25 years to maturity and sell for 96.5 percent of par. The market risk premium is 6.8 percent, T-bills are yielding 3.4 percent, and the firm's tax rate is 22 percent. What is the firm's market value capital structure? Note: Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616. What is the firm's cost of each form of financing? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. If the firm is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16
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