Adamson 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 $25\%.$ It can issue preferred stock that pays a constant dividend of

$$5\mathrm{.}00$ per year at $$54\mathrm{.}00$ per share. Also, its common stock currently sells for $$38\mathrm{.}00$ per share; the next expected dividend, $D_1,$ is $$3\mathrm{.}75$; and the dividend is

expected to grow at a constant rate of $7\%$ 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? Do not round intermediate calculations. Round your answers to two decimal places.

Cost of debt: $\%$

Cost of preferred stock: $\%$

Cost of retained earnings: $\%$

b$.$ What is Adamson's WACC? Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

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

Project $1$

Project $2$

Project $3$

$-$Select$-$

Project $4$