Question
Titan Mining Corporation has 9.2 million shares of common stock outstanding and 360,000 5.2 percent semiannual bonds outstanding, par value $1,000 each. The common stock
Titan Mining Corporation has 9.2 million shares of common stock outstanding and 360,000 5.2 percent semiannual bonds outstanding, par value $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 risk premium is 8 percent, T-bills are yielding 5 percent, and the companys tax rate is 22 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., .3216.) |
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