WACC. Look at the following book-value balance sheet for University Products Inc. The pre- ferred stock currently sells for $15 per share and pays a dividend of $2 a share. The common sto sells for $20 per share and has a beta of .8. There are 1 million common shares outstanding. The market risk premium is 10%, the risk-free rte is 6%, and the firm's tax rate is 40%. (1013-1) BOOK-VALUE BALANCE SHEET (Figures in $ millions) ssets Liabilities and Net Worth Bonds, coupon (maturity = 10 years, current yield to maturity = 9%) ash and short-term securities $ 1 8%, paid annually $10 counts receivable ventories 3 Preferred stock (par value $20 per share) 2 7 Common stock (par value $.10) 0.1 9.9 10 $32 Additional paid-in stockholders' equity Retained earnings ant and equipment 21 tal $32 a. What is the market debt-to-value ratio of the firm? b. What is University's WACC