Uralla Mining Company has 7.5 million ordinary shares outstanding, 250,000 shares of 4.2 per cent preference shares outstanding and 140,000 bonds with a semiannual coupon of 5.1 per cent outstanding, face value $1,000 each. The ordinary shares currently sell for $51 per share and have a beta of 1.15, the preference shares currently sell for $103 per share and bonds have 15 years to maturity and sell for 107 per cent of face value. The market risk premium is 7.5 per cent, Treasury notes are yielding 2.4 per cent and the company's tax rate is 30 per cent.

a. What is the firm's market value capital structure?

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?