Raymond Mining Corporation has 8.4 million shares of common stock outstanding, 280,000 shares of 6 percent $100 par value preferred stock outstanding, and 141,000 7.50 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $32 per share and has a beta of 1.20, the preferred stock currently sells for $94 per share, and the bonds have 20 years to maturity and sell for 113 percent of par. The market risk premium is 7.2 percent, T-bills are yielding 5 percent, and Raymond Minings tax rate is 40 percent.

a. What is the firms market value capital structure? (Round the final answers to nearest dollar amount.)

Debt: $ ?

Equity: $ ?

Preferred stock: $ ?

b. If Raymond Mining 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? (Do not round intermediate calculations. Round the final answer to 3 decimal places.)

Discount rate: ? %