Problem 13-7 WACC (LO1) Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $10 per share and has a beta of 0.9. There are 4 million common shares outstanding. The market risk premium is 8%, the risk-free rate is 4%, and the firm's tax rate is 21% Assets $2e.e $ 3.0 3.0 Cash and short-term securities Accounts receivable Inventories Plant and equipment BOOK-VALUE BALANCE SHEET (Figures in S millions) Liabilities and Net Worth Bonds, coupon = 5%, paid annually (maturity - 10 years, current yield to maturity = 7%) Preferred stock (par value $20 per share) Common stock (par value 50.10) Additional paid-in stockholders' equity Retained earnings Total 7. 25. $38.e Total a. What is the market debt-to-value ratio of the firm? IVE.LVIA LU at VAUV. ) Plant and equipment 25.0 Additional paid-in stockholders' equity Retained earnings Total Total $38.0 a. What is the market debt-to-value ratio of the firm? b. What is University's WACC? (For all the requirements, do not round intermediate calculations. Enter your answers as Answer is complete but not entirely correct. a. O O Market debt-to-value ratio WACC 28.92 9.89 8.% % % b