k,138 Question 6 Debt Preferred stock Common equity 25% 15% 60 % 100 % xpected net income this year is $34,285.72, its established dividend payout ratio is 30%, it 0% and investors expect earnings and dividends to grow at a constant rate of 9% in LEI's e tax rate is 4 future. LEI paid a dividend of $3.60 per share last year, and its stock currently sells at a price of per share. LEI can obtain new capital in the following ways: . Preferred: New preferred stock with a dividend of $11 can be sold to the public at a price of per share. Debt: Debt can be sold at an interest rate of 12%. i. Determine the cost of each capital structure component. li. Calculate the Weighted average cost of capital (WACC) ili LEI has the following investment opportunities (independent projects) that are typical a risk projects for the firm PROJECT COST AT t-0 A $10,000 B 20,000 10,000 D 20,000 E 10,000 RATE OF RETURN 17.4% 16.0% 14.2% 14.2% 12.0% Which projects should LEl accept? Why? k,138 Question 6 Debt Preferred stock Common equity 25% 15% 60 % 100 % xpected net income this year is $34,285.72, its established dividend payout ratio is 30%, it 0% and investors expect earnings and dividends to grow at a constant rate of 9% in LEI's e tax rate is 4 future. LEI paid a dividend of $3.60 per share last year, and its stock currently sells at a price of per share. LEI can obtain new capital in the following ways: . Preferred: New preferred stock with a dividend of $11 can be sold to the public at a price of per share. Debt: Debt can be sold at an interest rate of 12%. i. Determine the cost of each capital structure component. li. Calculate the Weighted average cost of capital (WACC) ili LEI has the following investment opportunities (independent projects) that are typical a risk projects for the firm PROJECT COST AT t-0 A $10,000 B 20,000 10,000 D 20,000 E 10,000 RATE OF RETURN 17.4% 16.0% 14.2% 14.2% 12.0% Which projects should LEl accept? Why