You are working in the Finance Department of Ranch Manufacturing, and 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 shown below. To finance the purchase, Ranch Manufacturing will sell 12 -year bonds with a $1,000 par value paying interest at a rate of 6 percent per year (with $2.00 dividend can be sold for $25. Common stock for Ranch Manufacturing is currently selling for $48 per share and the firm paid a $3 dividend last year. Dividends are expected to continue growing at a rate of 5 percent per year into the indefinite future. If the firm's tax rate is 25 percent, what discount rate should you use to evaluate the equipment purchase? Cost of Debt You are working in the Finance Department of Ranch Manufacturing, and 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 shown below. To finance the purchase, Ranch Manufacturing will sell 12 -year bonds with a $1,000 par value paying interest at a rate of 6 percent per year (with $2.00 dividend can be sold for $25. Common stock for Ranch Manufacturing is currently selling for $48 per share and the firm paid a $3 dividend last year. Dividends are expected to continue growing at a rate of 5 percent per year into the indefinite future. If the firm's tax rate is 25 percent, what discount rate should you use to evaluate the equipment purchase? Cost of Debt