Eagle Construction Co$.$ is a successful privately$-$held firm owned by Marquette alumni.

It has $$200$ million bonds outstanding due in ten years with a $7\%$ coupon paid semi$-$

annually. They are valued at $110\%$ of par value.

The company also has $25$ million shares of common stock outstanding among the

partners. The stock book value is $$2\mathrm{.}00/$share and is valued at $$\frac{11}{?}$ share.

A survey of publicly$-$held firms in their industry estimates a beta of $1\mathrm{.}1.$

The risk$-$free rate is $4\mathrm{.}5\%$ and the market equity return is $12\mathrm{.}5\%($which includes a

premium for their small size$).$

Eagle's tax rate is $21\%.$