Cooperton Inc. is a conglomerate rm in the United States. Its business covers many industries, such as retail, nancial services, technical products, and industrials. Given that WACC is important, Mr. Richard Cookson wants to know Cooperton Inc.'s WACC. Currently, Cooperton Inc. has 14 million shares of common stocks outstanding, 10 million shares of preferred stocks outstanding, and 200,000 corporate bonds outstanding. The common stock is currently selling for $30 per share, and has a beta of 1.5. The preferred stock is selling for $25 per share and the preferred stock pays a $3 annual dividend. The corporate bond's face value is $1,000 each and coupon payments of the corporate bond is annual. The corporate bonds have a maturity of 10 years and the coupon rate is 10% per year. Each bond is selling for $1,100. In addition, Cooperton Inc. borrowed a loan from HB SC, where the loan value is $100 million and the interest rate is 10% per year (EAR). The T-bills are yielding 4% per year, and the market risk premium is 10 percent. The tax rate is 35 percent. a. (6 points) What is the Cooperton Inc. '5 cost of common stock, cost of debt and cost of preferred stock? b. (4 points) What is Cooperton Inc.'s WACC? After calculating the WACC, Mr. Richard Cookson is considering two mutually exclusive projects: project X and Y. The project X is operating in the retail industry, the project Y is operating in the nancial services industry. The project X requires an initial investment of $1 million, and will generate cash ow of $ 0.6 million in the next two years. The project Y requires an initial investment $2 million and will generate cash ow of $0.8 million in the next three years. Meanwhile, the required return on project X is 10 percent, and the required return on the project Y is 8%. The detailed information about these two ro'ects is summarized as follows. Cash ow (X) Cash ow 0') -$1 million -$2 million 3% 0.6 million $0.8 million $ 0.6 million $0.8 million m m... c. (4 points) What are the IRS for the Project X and Y, respectively? (1. (4 points) Given this project information and your calculation of the firms' WACC in part (b), what are the NPVs for the Project X and Y, respectively? e. (2 points) Given your calculation, which project should be accepted and which project should be rejected?. Please briey state your reasons