Titan Mining Corporation has 10 million shares of common stock outstanding and 400,000 bonds outstanding with par value $1,000 each and 5 percent coupon rate paid semiannually. The common stock...

Titan Mining Corporation has 10 million shares of common stock outstanding and 400,000 bonds outstanding with par value $1,000 each and 5 percent coupon rate paid semiannually. The common stock currently sells for $40 per share and has a beta of 1.2, and the bonds have 10 years to maturity and sell for $1040. The return to market portfolio is 10 percent, T-bills are yielding 5 percent, and the company’s tax rate is 20 percent. If the company is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows?