I can't figure out this question for the life of me. I am working two weeks ahead of class due to a business trip and don't know what to do.

Martin Technologies Inc., a large electronics company, is evaluating the possible acquisition of Columbia Electronics, a regional electronics company. Martin's analysts project the following post-merger data for Columbia (in millions of dollars): 2015 2016 2017 2018 Net sales $300 $425 $475 $550 Selling and administrative expense 40 50 60 75 Interest 25 30 35 40 Tax rate after merger 35% Cost of goods sold as a percent of sales 75% Beta after merger 1.2250 Riskfree rate 3% Market risk premium 8% Continuing growth rate of cash flow available to Martin 6% If the acquisition is made, it will occur on January 1, 2015. All cash ows shown in the income statements are assumed to occur at the end of the year. Columbia currently has a capital structure of 40% debt, but Martin would increase that to 50% if the acquisition were made. Columbia, if independent, would pay taxes at 20%; but its income would be taxed at 35% if it were consolidated. Columbia's current marketdetermined beta is 1.15, and its investment bankers think that its beta would rise to 1.2250 if the debt ratio were increased to 50%. The cost of goods sold is expected to be 75% of sales, but it could vary somewhat. Depreciationgenerated funds would be used to replace wornout equipment, so they would not be available to Martin's shareholders. The riskfree rate is 3%, and the market risk premium is 8%. What is the appropriate discount rate for valuing the acquisition? % (to 4 decimals)