$10-12$ WACC Midwest Electric Company $($MEC$)$ uses only debt and common equity. It can borrow unlimited amounts at an interest rate of $r_d=10\%$ as long as it finances at its target capital structure, which calls for $45\%$ debt and $55\%$ common equity. Its last dividend was $$2,$ its expected constant growth rate is $4\%,$ and its common stock sells for $$20.$ MEC's tax rate is $40\%.$ Two projects are available: Project A has a rate of return of $13\%,$ while Project B$\text{'}$s return is $10\%.$ These two projects are equally risky and about as risky as the firm's existing assets.

a$.$ What is its cost of common equity?

b$.$ What is the WACC?

c$.$ Which projects should Midwest accept?