10-12 its WACC is 13.9 unlimited amounts at an interest rate of r debt WACC Empire Electric Company (EEC) uses only debt and common equity. It can borrow structure, which calls for 35% debt and 65% common equity. Its last dividend (D) was rate is 25%. Two projects are available: Project A has a rate of return of 12.5% and Project $2.20, its expected constant growth rate is 6%, and its common stock sells for $26. EEC's tax =9% as long as it finances at its target capital B's return is 11.5%. These two projects are equally risky and about as existing assets. a. What is its cost of common equity? b. What is the WACC? c. Which projects should Empire accept? risky as the firm's