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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

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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 fate of fd=11%, and its tax rate is 25 tili. It can issue preferred stock that pays a constant dividend of 36.00 per year at $56.00 per share. Aso, its common steck currently sells for $50.00 per share; the next expected dividend, Df, is $5.25; and the dividend is expected to grow at a constant rate of 5% per year. The target capital structure consests of 75% common stock, 15\%l, debt, and 10% preferred stock, a. What is the cost of each of the capital compenents? Da not round intermediate calculationa. Round your answers to two decimal places. Cost of debt: Cost of preferred stock: Cost of istained eaminges b. What is Adamson's WACC? Do not round intermediate calculations. Round your answer to two decimal places. c. Oniv projects whth evpected returns that exceed WACc will be accepted. Which projects should Adamson accept? Project 1 Project 2 Project 3 Project 4

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