Show all your work (use of formula, etc.) in solving the problems. You still need to show your work even if you use the financial calculator to get the answers. (Please show all work and do not use excel)

3. Forrest Corporation has 500,000 shares of common stock, 10,000 shares of preferred stock, and 5,000 bonds with 8 percent (coupon) outstanding. The common stock currently sells for $25 per share and has a beta of 0.95. Preferred stocks pay a dividend of $8 per share and currently sell for $98 with a floatation cost of $2 per share. The bonds have par value of $1,000, 20 years to maturity, currently sell for 102.5 percent of par, and the coupons are paid semiannually. The bonds floatation cost is 1% of the current market price. The expected return on market portfolio is 9 percent, T-bills are yielding 2 percent, and the tax rate is 35 percent. What is the firms market value capital structure? If Forrest 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?