Empire Electric Company $($EEC$)$ uses only debt and common equity. It can borrow unlimited amounts at an interest rate of $r_d=11\%$ as long as it

finances at its target capital structure, which calls for $45\%$ debt and $55\%$ common equity. Its last dividend $(\{$:$D_0)$ was $$3\mathrm{.}00,$ its expected constant growth

rate is $6\%,$ and its common stock sells for $$28.$ EEC's tax rate is $25\%.$ Two projects are available: Project A has a rate of return of $14\%,$ and Project B$\text{'}$s

return is $11\%.$ These two projects are equally risky and about as risky as the firm's existing assets.

a$.$ What is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

b$.$ What is the WACC? Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

c$.$ Which projects should Empire accept?