Titan Mining Corporation has 8.5 million shares of common stock outstanding and 290,000 4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $33 per share and has a beta of 1.25, and the bonds have 10 years to maturity and sell for 114 percent of par. The market risk premium is 7.3 percent, T-bills are yielding 6 percent, and the companys tax rate is 38 percent.

a.

What is the firm's market value capital structure?

Weight of Debt ____ Weight of Equity _____

b.	If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? Discount rate _______