Score: 0 of 3 pts 6 of 6 (0 complete) HW Score: 0%, 0 of 11 pt P14-27 (similar to) Question Help (Weighted average cost of capital) As a member of the Finance Department of Ranch Manufacturing, 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 will sell 10-year bonds paying interest at a rate of 74 percent per year (with semiannual payment) at the market price of $1,071. Preferred stock paying a $2.02 dividend can be sold for 524 33. Common stock for Ranch Manufacturing is currently selling for $55.01 per share and the firm poid a $306 dividend last year. Dividends are expected to continue growing at a rate of 5.3 percent per year into the indefinite future. If the firm's tax rate is 30 percent what discount rate should you use to evaluate the equipment purchase? a. Calculate component weight of capital. The weight of debt in the firm's capital structure is % (Round to two decimat places.) Enter your answer in the answer box and then click Check Answer. 6 Parts remaining Clear All Check Answer sources for the firm, you have determined the market value of the firm's capital structure as follows: Ranch Manufacturing will sell 10-year bonds paying interest at a rate of 7.4 percent per year (with semiannual payment) at the market paying a $2.02 dividend can be sold for $24.33. Common stock for Ranch Manufacturing is currently selling for $55.01 per share and t st year. Dividends are expected to continue growing at a rate of 5.3 percent per year into the indefinite future. If the firm's tax rate is 30 d you use to evaluate the equipment purchase? mt weights of capital he firm's capital Data Table - X Source of Capital Market Values Bonds $4,400,000 Preferred stock $2,200,000 Common stock $5,900,000 (Click on the icon in order to copy its contents into a spreadsheet.) Print Done er in the answer box and then click Check Answer, Clona Check And