Adams Corporation is considering four average-risk projects with the following costs and rates of return:

Project	Cost	Expected Rate of Return
1	$2,000	16.00%
2	3,000	15.00
3	5,000	13.75
4	2,000	12.50

The company estimates that it can issue debt at a rate of rd = 11%, and its tax rate is 40%. It can issue preferred stock that pays a constant dividend of $3 per year at $49 per share. Also, its common stock currently sells for $39 per share; the next expected dividend, D1, is $4.50; and the dividend is expected to grow at a constant rate of 5% per year. The target capital structure consists of 75% common stock, 15% debt, and 10% preferred stock.

What is the cost of each of the capital components? Round your answers to two decimal places. Cost of debt % Cost of preferred stock % Cost of retained earnings %

What is Adams' WACC? Round your answer to two decimal places. %

Only projects with expected returns that exceed WACC will be accepted. Which projects should Adams accept?

Project 1	-Select-accept reject
Project 2	-Select-accept reject
Project 3	-Select-accept reject
Project 4	-Select-accept reject