Expected Rate of Return 16.00% 15.00 13.75 12.50 Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project Cost 1 $2,000 2 3,000 3 5,000 4 2,000 The company estimates that it can issue debt at a rate of ra = 11%, and its tax rate is 40%. It can issue preferred stock that pays a constant dividend of $5 per year at $57 per share. Also, its common stock currently sells for $33 per share the next expected dividend, Di, is $3.25, and the dividend is expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common stock, 15% debt, and 10% preferred stock a, What is the cost of each of the capital components? Do not round Intermediate calculations. Round your answers to two decimal places. Cost of debt: Cost of preferred stock: Cost of retained earnings: b. What is Adamson's WACC? Do not round intermediate calculations. Round your answer to two decimal places. % % % c. Only projects with expected returns that exceed WACC will be accepted. Which projects should Adamson accept? Project 1 Select Project 2 Project 3 Project 4 Select 1-Select v ReadSpeaker