Big Data Ltd has 7,500 shares of common stock outstanding at a price of $18 a share. It also has 8,000 shares of preferred stock outstanding at a price of $23 a share. There are 500 bonds outstanding...

Big Data Ltd has 7,500 shares of common stock outstanding at a price of $18 a share. It also has 8,000 shares of preferred stock outstanding at a price of $23 a share. There are 500 bonds outstanding that will mature in four years, have a face value of $1,000, and sell at 98.4 % of par. And the company tax rate is 34%.

a) Calculate the market value of the company

b)

1. Calculate capital structure of the company. Identify the total weights of equity funding (rounded off to two decimal places)


2. Calculate weighted average cost of capital (WACC) of the company under the traditional tax system, assuming that the required rate of return for ordinary equity is 12%, required rate of return for the preferred share is 14%, before-tax YTM of the bond is 10.5%.