Tenang Corporation has, 250,000 shares of 6% preferred stock outstanding, 105,000 7.5 percent semiannual bond outstanding, par value of RM1000 each and 9 million shares of common stock outstanding. The common stock has a beta of 1.25 and currently sells for RM34 per share. The preferred stock currently sells for RM91per share and the bond have 15 years to maturity and sells for 93% of par. The market risk premium is 8.5 percent. T-bills are yielding 5%. Tenang Corporation tax is at 35%.   What is the firm’s market value capital structure              If Tenang Corporation is evaluating a new investment project that has the same risk as the firm’s typical project, calculate WACC.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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  1. Tenang Corporation has, 250,000 shares of 6% preferred stock outstanding, 105,000 7.5 percent semiannual bond outstanding, par value of RM1000 each and 9 million shares of common stock outstanding. The common stock has a beta of 1.25 and currently sells for RM34 per share. The preferred stock currently sells for RM91per share and the bond have 15 years to maturity and sells for 93% of par. The market risk premium is 8.5 percent. T-bills are yielding 5%. Tenang Corporation tax is at 35%.

 

  1. What is the firm’s market value capital structure           

 

If Tenang Corporation is evaluating a new investment project that has the same risk as the firm’s typical project, calculate WACC.                       

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