La Gurung Attempt 1 CUCdtt Question 12 (10 points) Burnie Ltd is considering the purchase of a new equipment for its manufacturing plant and has asked you to work out an appropriate discount rate to use when evaluating the project. Information about Burnie's current capital structure is as follows: Source of capita. Book value Market value Debts $1,500,000 $1,600,000 Ordinary share capital $1,800,000 $3,000,000 Total $3,300,000 $3,600,000 To finance the purchase, Burnie can sell 10 year-bonds paying annual coupon interest at a rate of 6%. The bond can be sold at par. Ordinary shares of Telstra are currently selling at $20.4. The company paid a dividend of $2.00 this year and dividends are expected to growth by an average of 2% per year for the indefinite future. The current company's tax rate is 30%. Paragraph V BI U