Berta Industries stock has a beta of 1.20. The company just paid a dividend of $0.50, and the di… Show more Berta Industries stock has a beta of 1.20. The company just paid a dividend of $0.50, and the dividends are expected to grow at 6 percent. The expected return on the market is 11 percent, and Treasury bills are yielding 4.6 percent. The most recent stock price for Berta is $63. a. Calculate the cost of equity using the DCF method. (Round your answer to 2 decimal places. (e.g., 32.16)) DCF method % b. Calculate the cost of equity using the SML method. (Round your answer to 2 decimal places. (e.g., 32.16)) SML method % Titan Mining Corporation has 9.0 million shares of common stock outstanding, 340,000 shares of 6 percent preferred stock outstanding, and 180,000 7.8 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $38 per share and has a beta of 1.50, the preferred stock currently sells for $88 per share, and the bonds have 20 years to maturity and sell for 119 percent of par. The market risk premium is 7.8 percent, T-bills are yielding 3 percent, and Titan Mining’s tax rate is 36 percent. a. What is the firm’s market value capital structure? (Round your answers to 4 decimal places. (e.g., 32.1616)) Market value Debt Preferred stock Equity b. 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? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Discount rate % • Show less