Raymond Mining Corporation has 8.2 million shares of common stock outstanding, 260,000 shares of 4% $100 par value preferred stock outstanding, and 137,000 7.50% semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $30 per share and has a beta of 1.10, the preferred stock currently sells for $92 per share, and the bonds have 10 years to maturity and sell for 110% of par. The market risk premium is 7.0%, T-bills are yielding 3%, and Raymond Mining's tax is 38%. . What is the firm's market value capital structure? (Enter your answers in whole dollars.) Market value Debt $ Equity Preferred stock o. If Raymond Mining is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the irm use to discount the project's cash flows? (Do not round intermediate calculations. Enter your answer as a percentage rounded o 3 decimal places.) Discount rate

Raymond Mining Corporation has 8.2 million shares of common stock outstanding, 260,000 shares of 4% $100 par value preferred stock outstanding, and 137,000 7.50% semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $30 per share and has a beta of 1.10, the preferred stock currently sells for $92 per share, and the bonds have 10 years to maturity and sell for 110% of par. The market risk premium is 7.0%, T-bills are yielding 3%, and Raymond Mining's tax is 38%. . What is the firm's market value capital structure? (Enter your answers in whole dollars.) Market value Debt $ Equity Preferred stock o. If Raymond Mining is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the irm use to discount the project's cash flows? (Do not round intermediate calculations. Enter your answer as a percentage rounded o 3 decimal places.) Discount rate

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 8P

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