ook ences Lingenburger Cheese Corporation has 7.2 million shares of common stock outstanding, 260,000 shares of...

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ook ences Lingenburger Cheese Corporation has 7.2 million shares of common stock outstanding, 260,000 shares of 4.4 percent preferred stock outstanding, par value of $100; and 145,000 bonds with a semiannual coupon rate of 5.5 percent outstanding, par value $2,000 each. The common stock currently sells for $65 per share and has a beta of 1.15, the preferred stock has a par value of $100 and currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 105 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 3.1 percent, and the company's tax rate is 21 percent. a. What are the firm's market value capital structure weights? Note: Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616. b. If the company 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? Note: Do not round intermediate calculations enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Debt Preferred stock Equity b. Discount rate 8.55 % CH ook ences Lingenburger Cheese Corporation has 7.2 million shares of common stock outstanding, 260,000 shares of 4.4 percent preferred stock outstanding, par value of $100; and 145,000 bonds with a semiannual coupon rate of 5.5 percent outstanding, par value $2,000 each. The common stock currently sells for $65 per share and has a beta of 1.15, the preferred stock has a par value of $100 and currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 105 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 3.1 percent, and the company's tax rate is 21 percent. a. What are the firm's market value capital structure weights? Note: Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616. b. If the company 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? Note: Do not round intermediate calculations enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Debt Preferred stock Equity b. Discount rate 8.55 % CH