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 rd=9%, and its tax rate is 30%. It can issue preferred stock that pays a constant dividend of $5 per year at $59 per share. Also, its common stock currently selis for $33 per share; the next expected 'dividend, D1, is $3.50; 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. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is the cost of each of the capital components? Round your answers to two decimal places. Do not round your intermediate calculations. Cost of debt Cost of preferred stock Cost of retained earnings b. What is Adamson's WACC? Round your answer to two decimal places. Do not round your intermediate calculations. % c. Only projects with expected returns that exceed WACC will be accepted. Which projects should Adamson accept? b. What is Adamson's WACC? Round your answer to two decimal places. Do not round your intermediate calculations. % c. Only projects with expected returns that exceed WACC will be accepted. Which projects should Adamson accept? \begin{tabular}{l|r} Cost of debt, Te & 9.00% \\ \hline Tax rate, T & 30.00% \\ \hline Preferred dividend & $5.00 \\ \hline Preferred stock price, Pp & $59.00 \\ \hline Common stock price, Po & $33.00 \\ \hline Expected common dividend, D, & $3.50 \\ \hline Common stock constant growth rate, gn & 7.00% \\ \hline \% common stock in capital structure & 75.00% \\ \hline \% debt in capital structure & 15.00% \\ \hline preferred stock in capital structure & 10.00% \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \begin{tabular}{l} Cost of capital components \\ \& WACC calculation: \end{tabular} & Weights & After-tax Cost & Weighted Cost \\ \hline After-tax cost of debt, rod (1T) & 15.00% & & \\ \hline Cost of preferred stock, rp & 10.00% & & \\ \hline Cost of common stock, rs & 75.00% & & \\ \hline & & WACC = & \\ \hline \multicolumn{4}{|l|}{ Projoct acceptance analysis: } \\ \hline Projects & Cost & \begin{tabular}{l} Rate of \\ Return \end{tabular} & Accept Project? Y/N \\ \hline 1 & $2,000 & 16.00% & \\ \hline & $3,000 & 15.00% & \\ \hline 3 & $5,000 & 13.75% & \\ \hline 4 & $2,000 & 12.50% & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline Formulas & & . & E \\ \hline 7 & 182 & & \\ \hline \begin{tabular}{l} Cost of capital components \\ & WACC calculation: \end{tabular} & Weights & After-tax Cost & Weighted Cost \\ \hline After-tax cost of debt, rd(1T) & 15.00% & \#N/A & AN/A \\ \hline Cost of preferred stock, rp & 10.00% & \#N/A & HN/A \\ \hline Cost of common stock, rs & 75.00% & \#N/A & #N/A \\ \hline e & & WACC = & HN/A \\ \hline \multicolumn{4}{|l|}{ Proloct acceptanco analysis: } \\ \hline Projects & Cost & \begin{tabular}{l} Rate of \\ Return \end{tabular} & Accept Project? Y/N \\ \hline 1 & $2,000 & 16.00% & HN/A \\ \hline 2 & $3,000 & 15.00% & #N/A \\ \hline 3 & $5,000 & 13.75% & HN/A \\ \hline 4 & $2,000 & 12.50% & HN/A \\ \hline \end{tabular} Sheet1 + Workbook Statistics