posted by Susie .
To finanance a purchase a company will sell 10 year bonds paying 6.6% per year at the market price of $1062. Preferred stock paying a $2.05 dividend can be sold for 25.93. Common stock is cirrently seeling for 54.29 per share and the firm paid a 2.92 dividend last year. Dividends are expected to grow at a rate of 4.8% per year into the indefinite future. if the firms tax rate is 30%, what discount rate should you use to evaluate the equipment purchase? And what is the WACC?