The Nile Corporation has 9.9 million shares of common stock outstanding and 430,000 6 percent semiannual bonds outstanding, parvalue $1,000 each. The common stock currently sells for $47 per share and has a beta of 1.45. The bonds have 20 years to maturityand sell for 118 percent of par. The market risk premium is 8.7 percent, T-bills are yielding 5 percent, and the company's tax rate is 24percenta. What is the firm's market value capital structure?Note: Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.b. If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should thefirm use to discount the project's cash flows?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.a. DebtEquityb. Discount rate0.52180.47826.95 %

a.. Market shares= shares of common stock x per share=9,900,000 x 47=465,300,000Mark value debt= 6%…

Answered: The Nile Corporation has 9.9 million…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter20: Financing With Derivatives

Section: Chapter Questions

Problem 14P

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