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Titan Corporation has 9.2 million shares of common stock outstanding and 360,0005.2 percent semiannual bonds outstanding. With a par value of $1,000 each. The common
Titan Corporation has 9.2 million shares of common stock outstanding and 360,0005.2 percent semiannual bonds outstanding. With a par value of $1,000 each. The common stock currently sells for $40 per share and has a beta of 1.3 ; the bonds have 15 years to maturity and sell for 111 percent of par. The market rlsk premlum is 8 percent, T-bills are ylelding 5 percent, and the company's tax rate 1522 percent. a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 1616.) b. If the company is evaluating a new Investment project that has the same risk as the firm's typlcal project, what rate should the firm use to dlscount the project's cash flows? (Do not round intermedlate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Titan Corporation has 9.2 million shares of common stock outstanding and 360,0005.2 percent semiannual bonds outstanding. With a par value of $1,000 each. The common stock currently sells for $40 per share and has a beta of 1.3 ; the bonds have 15 years to maturity and sell for 111 percent of par. The market rlsk premlum is 8 percent, T-bills are ylelding 5 percent, and the company's tax rate 1522 percent. a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 1616.) b. If the company is evaluating a new Investment project that has the same risk as the firm's typlcal project, what rate should the firm use to dlscount the project's cash flows? (Do not round intermedlate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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