Adams Corporation is considering four average-risk projects with the following costs and rates of return: The company estimates that it can issue debt at a rate of r_d = 10 %, and its tax rate is 35%. It can issue preferred stock that pays a constant dividend of $4 per year at $58 per share. Also, its common stock currently sells for $40 per share; the next expected dividend, D_1, is $4.25; and the dividend is expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common stock, 15% debt, and 10% preferred stock. a. What is the cost of each of the capital components? Cost of debt % Cost of preferred stock % Cost of retained earnings % b. What is Adams' WACC? % c. Only projects with expected returns that exceed WACC will be accepted. Which projects should Adams accept? Project 1 Project 2 Project 3 Project 4