Titan Mining Corporation has 8.5 million shares of common stock outstanding, 250,000 shares of 5 percent preferred stock outstanding and 135,000 7.5% semiannual bonds outstanding. The common stock currently sells for Rs 34 per share and has a beta of 1.25, the preferred stock currently sells for Rs 91 per share, and the bonds have 15 years to maturity and sell for 110 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 4 percent, and Titan Minings tax rate is 35 percent. If Titan Mining is evaluating a new investment project that has the same risk as the firms typical project, what rate should the firm use to discount the projects cash flows?

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