What rate should the firm use to discount the projects cash

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Question: Tomato Corporation has 9.3 million shares of common stock outstanding and 260,000 bonds outstanding, par value 1,000 baht each with 6.8% coupon rate. The common stock currently sells for 34 baht per share and has a beta of 1.20, and the bonds sell at par. The market risk premium is 7 percent, T- bills are yielding 3.5 percent, and Tomato's tax rate is 35 percent. If Tomato is evaluating a new investment project that has the same risk as the ?rm's typical project, what rate should the firm use to discount the project's cash flows? Hint: ?nd WACC

Reference no: EM133377283

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