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What is the firm market value weight of equity

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Tarrasa Mining Corporation has 9.3 million shares of common stock outstanding and 215,000 6.1% semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $23 per share and has a beta of 0.6. The bonds have 25 years to maturity and sell for 98% of par. The market risk premium is 6.2%, T-bills are yielding 5.5%, and Tarrasa Mining's tax rate is 38%.

What is the firm's market value weight of equity? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

What is the firm's market value weight of debt? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

What is the firm's cost of equity? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

What is the firm's cost of debt? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

If Tarrasa Mining 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?

Reference no: EM132679084

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