Evaluate the equipment purchase

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Bonds 4,500,000 Preferred stock 1,900,000 common stock 5,600,000 To finance the purchase, Ranch Manufacturing will sell 10-year bonds paying 6.8% per year at the market price of $1,041. Preferred stock paying $1.98 dividend can be sold for $25.54. Common stock for a rate of 5.1% per year into the indefinite future. If the firms tax rate is 30%, what discount rate should you use to evaluate the equipment purchase?

Reference no: EM132443347

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