P14-27 (similar to) Question Help (Weighted average cost of capital) As a member of the Finance Department of Ranch Manacturing your supervisor has asked you to compute the appropriate discount rate to use when evaluating the purchase of new packaging equipment for the plant. Under the assumption that the firm's present capital structure reflects the appropriate mix of capital sources for the firm, you have determined the market value of the firm's capital structure as follows: To finance the purchase Ranch Manufacturing wil so 10 year bonds paying interest at a rate of 6.6 percent per year with manual payment at the market price of $1.036. Preferred stock paying a $2.07 dividend can be sold for $28.77. Common stock for Ranch Manufacturing is currently selling for $5404 per share and the firm paid a $2.94 dividend last year. Dividends are expected to continue growing at a rate of 4.9 percent per year into the indefinite ture. If the firm's tax rate is 30 percent, what discount rate should you use to evaluate the equipment purchase? a. Caloutte component weight of capital The weight of debt in the tow's capital structure is [I]* (Hound to two decimal places) Data Table Source of Capital Bonds Preferred stock Common stock Market Values $3,800,000 51,800,000 $5.500.000 Enter your answer in the answer box and then click Check Answer Print Done 6 Parts CA remaining