ZXY Corp has the following book-value based Balance Sheet: Fixed & Current Assets 1000000 8% Debt 400000 10% Preference Share 100000 Equity 500000 Total Assets Total Liabilities and 1000000 Equities 1000000 The bond has a par value of $1000, will mature in 5 years, and has YTM of 8% The preference share which has a par value of $100 is currently trading at $139. There are 100,000 common shares outstanding and market price per share is $28. The risk-free rate is 4%, market return is 10% Beta of the ZXY stock is 1.6. Corporate Tax Rate is 32%. a. Find the market value of each type of capital. 16 marks) b. Compute the market value based weights for each source of capital. [6 marks) c. Compute the Weighted Average Cost of Capital (WACC). [6 marks) d. If the company is evaluating a new investment proposal which is in the similar risk class as the company, what should be the hurdle rate? [2 marks]