Empire electric company 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 30% debt and 70% common equity. it's lost dividend (Do) was $3.05, it's expected constant growth rate is 5% and it it's common stock sells for $26. EEC's tax rate is 25%. these two projects are available project A has a rate of return of 15%, and project B's rate of return is 10%. these two projects are equally risky and about as risky as the firms 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 WACC? do not round intermediate calculations. Round your answer to two decimal places.

___ %

c. which projects should empire except

project a

or

project b

Atamps Keep the Highest/ 10 & Problem 10.12 (WACC) A-Z elook Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of 10% as long as it finances et target capital structure, which calls for 30% debt and 70% common equity. Its tast dividend (O) was $3.05, as expected constant growth rate is 5%, and its common stock sells for 26. EEC tax rate is 25. Two projects are available: Project A has a rate of return of 154, d Project's return is 10%. These two projects are equally risky and about as risky as the firm's existing assets. 1. What is to cost of common equity? Do not found intermediate calculations. Hound your answer to two decimal places 1. What is the WACCDo not round intermediate calculations. Round your answer to two deca places Which projects should Empire accept? Pro Grade it Now Save & Continue Continue without saving