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

Project Cost Expected Rate of Return

$1$ $$2,00016\mathrm{.}00\%$

$23,00015\mathrm{.}00$

$35,00013\mathrm{.}75$

$42,00012\mathrm{.}50$

The company estimates that it can issue debt at a rate of rd $=11\%,$ and its tax rate is $25\%.$ It can issue preferred stock that pays a constant dividend of $$6\mathrm{.}00$ per year at $$59\mathrm{.}00$ per share. Also, its common stock currently sells for $$53\mathrm{.}00$ per share; the next expected dividend, D$1,$ is $$5\mathrm{.}75$; 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? Do not round intermediate calculations. Round your answers to two decimal places.

Cost of debt: $\%$

Cost of preferred stock: $\%$

Cost of retained earnings: $\%$

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

$\%$

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

Project $1$

Project $2$

Project $3$

Project $4$