Glencor is evaluating four average-risk projects with the following costs and rates of return:

Project	Cost (R)	Expected Rate of Return
1	2,000	16.00%
2	3,000	15.00%
3	R,000	13.75%
4	2,000	12.50%

The company estimates that it can issue debt at a rate of r_d =10%, and its tax rate is 30%. It can issue preferred shares that pays a constant dividend of R5.00 per year at R49.00 per share. Also, its common shares currently sell for R36.00 per share; the next expected dividend, D₁, is R3.50; and the dividend is expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common shares, 15% debt, and 10% preferred shares.

Required:

6.1	What is the cost of each of the capital components?	(3)
6.2	What is Adamss WACC?	(4)
6.3	Only projects with expected returns that exceed WACC will be accepted. projects should Adams accept?	Which (3)