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Lingenburger Cheese Corporation has 7.8 million shares of common stock outstanding, 290,000 shares of 4.3 percent preferred stock outstanding, par value of $100; and 175,000
Lingenburger Cheese Corporation has 7.8 million shares of common stock outstanding, 290,000 shares of 4.3 percent preferred stock outstanding, par value of $100; and 175,000 bonds with a semiannual coupon rate of 5.9 percent outstanding, par value $2,000 each. The common stock currently sells for $59 per share and has a beta of 1.05, the preferred stock has a par value of $100 and currently sells for $97 per share, and the bonds have 16 years to maturity and sell for 103 percent of par. The market risk premium is 6.8 percent, T-bills are yielding 3.5 percent, and the companys tax rate is 22 percent. What is the firms market value capital structure? Note: Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616. 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? Note: Do not round intermediate calculations enter your answer as a percent rounded to 2 decimal places, e.g., 32.16
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