style="color:rgb(51,51,51);">Titan Mining Corporation has 9.2 million shares of common stock outstanding and 270,000 5.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $41 per share and has a beta of 1.20, and the bonds have 20 years to maturity and sell for 95 percent of par. The market risk premium is 5 percent, T-bills are yielding 3 percent, and Titan Mining's tax rate is 35 percent.
What is the firm's market value capital structure?
If Titan 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?