3. HD Industries has determined the market value of the firm's capital structure as follows: Source of capital Market value Bonds $4,000,000 Common stock $6,000,000 To finance the purchase, ABC will sell 20-year bonds, paying 8 percent semiannually, at the market price of $1,100. Flotation costs for issuing the bonds will be $20 per bond. Common stock is currently selling for $80 per share. The firm expects to pay a $2 dividend next year and expects to continue growing at a rate of 8 percent per year. Flotation costs for issuing new common share will be 10 percent of the market price. The firm's marginal tax rate is 34%. What discount rate should you use to evaluate the purchase