Empire Electric Company $($EEC$)$ uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd $=9\%$ as long as it finances at its target capital structure, which calls for $25\%$ debt and $75\%$ common equity. Its last dividend $($D$0)$ was $$2\mathrm{.}75,$ its expected constant growth rate is $6\%,$ and its common stock sells for $$30.$ EEC's tax rate is $25\%.$ Two projects are available: Project A has a rate of return of $15\%,$ and Project B$\text{'}$s return is $8\%.$ These two projects are equally risky and about as risky as the firm's existing assets.