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Titan Corporation has 9.3 million shares of common stock outstanding and 370,000 6.1 percent semiannual bonds outstanding, with a par value of $1,000 each. The common stock currently sells for $41 per share and has a beta of 1.25; the bonds have 20 years to maturity and sell for 112 percent of par. The market risk premium is 8.1 percent, T-bills are yielding 4 percent, and the company's tax rate is 23 percent.
A. What is the firm's market value capital structure?
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?

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