Empire Electric Company ( EEC ) uses only debt and common equity. It can borrow unlimited amounts
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Empire Electric Company EEC uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd as long as it finances at its target capital structure, which calls for debt and common equity. Its last dividend D was $ its expected constant growth rate is and its common stock sells for $ EEC's tax rate is Two projects are available: Project A has a rate of return of and Project Bs return is These two projects are equally risky and about as risky as the firm's existing assets.
What is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
What is the WACC? Do not round intermediate calculations. Round your answer to two decimal places.
Which projects should Empire accept?
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