Question
Preferred stock outstanding shares outstanding = 250,000 Coupon rate = 5% Share price = $91 Par value $100 Market Market risk premium = 7.50% Risk-free
Preferred stock outstanding
shares outstanding = 250,000
Coupon rate = 5%
Share price = $91
Par value $100
Market
Market risk premium = 7.50%
Risk-free premium = 4%
Tax rate = 35%
complete the following analysis. Do not hard code values in your calculations.
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
1. Calculate the market value capital structure and WACC. Finding the WACC - Excel ? X Siss HOME INSERT - Sign In FILE PAGE LAYOUT FORMULAS DATA REVIEW VIEW Paste B I U - - -A- Alignment Number Editing Conditional Format as Cell Formatting Table Styles Styles Clipboard Font 1 x fx AB E F G 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 $91 per share, and the bonds have 15 years to maturity and sell for 114 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 4 percent, and Titan Mining's tax rate is 35 percent. Debt Bonds outstanding Settlement date Maturity date Annual coupon rate Coupons per year Bond price (% of par) Par value ($) 135,000 01/01/00 01/01/15 7.50% 114 1,000 Common stock Shares outstanding Beta Share price 8,500,000 1.25 34 Preferred stock outstanding ... Sheet1 ... +Step by Step Solution
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