Novartis Pharmaceutical Inc. uses only debt and common equity. It can borrow unlimited amounts at an interest rate of $8\%$ as long as it finances at its target capital structure, which calls for $30\%$ debt and $70\%$ common equity. Its last dividend was $$2\mathrm{.}5,$ expected constant growth in dividends is $6\%$ and the companys common stock currently sells for $$26.$ Marginal tax rate is $25\%.$ The company has two projects available: Project A has a rate of return of $12\%$ and project Bs return is $9\mathrm{.}5\%.$ Both projects are equally risky and about as risky as the firms existing assets. a$.$ What is the cost of common equity?b$.$ What is the WACC?c$.$ Which project should the company accept?