1. Titan Mining Corporation has 8 million shares of common stock outstanding, 5 million shares of preferred stock outstanding, and 100,000 units of 9 percent semiannual bonds outstanding, par value $1,000 each. The preferred stock pays a dividend of $6 per share. The common stock currently sells for $32 per share and has a beta of 1.15, the preferred stock currently sells for $67 per share, and the bonds have 15 years to maturity and sell for 91 percent of par. The market risk premium is 10 percent, T-bills are yielding 5 percent, and Titan Minings tax rate is 35 percent.

1. What is the firms market value capital structure?
2. If Titan 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?

1. Takelmer Industries has a different WACC for each of three types of projects. Low-risk projects have an 8% WACC, average-risk projects a 10% WACC, and high-risk projects a 12% WACC. Which of the following projects do you recommend that the firm accept?

Project	Level of Risk	IRR
A	Low	9.50%
B	Average	8.50%
C	Average	7.50%
D	Low	9.50%
E	High	14.50%
F	High	17.50%
G	Average	11.50%

1. A, B, C, D, and G
2. B, C, E, F, and G
3. A, D, E, F, and G
4. A, B, C, D, E, F, and G