Empire Electric Company (EEC) uses only debt and common equity It can borrow unlimited amounts at an interest rate of r d 10 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 $1 70, its expected constant growth rate is 3 , and its common stock sells for $21 EEC's tax rate is 25 Two projects are available Project A has a rate of return of 14 , and Project B's return is 9 These two projects are equally risky and about as risky as the firm's existing assets What is its cost of common equity Do not round intermediate calculations Round your answer to two decimal places What is the WACC Do not round intermediate calculations Round your answer to two decimal places Which projects should Empire accept Select Project AProject BItem 3 Will give thumbs up for right answer 9 Problem 10 12 (WACC) ook Empire Electric Company (EEC) uses only debt and common equity It can borrow unlimited amounts at an interest rate of rd 10 as long as it finances at its target capital structure, which calls for 45 debt and 55 common equity Its last dividend (Do) was $1 70, its expected constant growth rate is 3 , and its common stock sells for $21 EEC's tax rate is 25 Two projects are available Project A has a rate of return of 14 , and Project B's return is 9 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 Select

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Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of r d = 10% as

Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of r_d = 10% as long as it finances at its target capital structure, which calls for 45% debt and 55% common equity. Its last dividend (D₀) was $1.70, its expected constant growth rate is 3%, and its common stock sells for $21. EEC's tax rate is 25%. Two projects are available: Project A has a rate of return of 14%, and Project B's return is 9%. These two projects are equally risky and about as risky as the firm's existing assets.

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

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

%
Which projects should Empire accept?

-Select-Project AProject BItem 3

image text in transcribed Will give thumbs up for right answer

9. Problem 10.12 (WACC) ook Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd 10% as long as it finances at its target capital structure, which calls for 45% debt and 55% common equity. Its last dividend (Do) was $1.70, its expected constant growth rate is 3%, and its common stock sells for $21 EEC's tax rate is 25%. Two projects are available: Project A has a rate of return of 14%, and Project B's return is 9%. 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? -Select