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) Hankins Corporation has 8 million shares of common stock outstanding, 920,000 shares of preferred stock...

  1. ) Hankins Corporation has 8 million shares of common stock outstanding, 920,000 shares of preferred stock outstanding, and 180,000 of 5.5 percent semiannual bonds outstanding, par value $1,000 each. The annual dividend for the preferred stocks is $4.8 per share. The common stock currently sells for $39 per share and has a beta of 1.26, the preferred stock currently sells for $80 per share, and the bonds have 25 years to maturity and sell for 98 percent of par. The expected return on market is 9.6% and the T-bills are yielding 2.8 percent, and the firm's tax rate is 34 percent.
  1. What is the firm's market value capital structure?
  2. If the firm 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?

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