Question
Titan Mining Corporation has 9.8 million shares of common stock outstanding, 420,000 shares of 5 percent preferred stock outstanding, and 220,000 8.6 percent semiannual bonds
Titan Mining Corporation has 9.8 million shares of common stock outstanding, 420,000 shares of 5 percent preferred stock outstanding, and 220,000 8.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $46 per share and has a beta of 1.40, the preferred stock currently sells for $96 per share, and the bonds have 15 years to maturity and sell for 117 percent of par. The market risk premium is 8.6 percent, T-bills are yielding 4 percent, and the companys tax rate is 40 percent. |
a. | What is the firms market value capital structure?
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