Now it's time for you to practice what you've learned.

Suppose Mullens Corporation is considering three average$-$risk projects with the following costs and rates of return:

Mullens estimates that it can issue debt at a rate of $r_d=25\mathrm{.}00\%$ and a tax rate of $T=15\mathrm{.}00\%.$ It can issue preferred stock that pays a constant

dividend of $D_p=$$$15\mathrm{.}00$ per year and at $P_p=$$$60\mathrm{.}00$ per share.

Also, its common stock currently sells for $P_0=$$$16\mathrm{.}00$ per share. The expected dividend payment of the common stock is $D_1=$$$4\mathrm{.}00$ and the

dividend is expected to grow at a constant annual rate of $g=10\mathrm{.}00\%$ per year.

Mullens' target capital structure consists of $w_s=75\mathrm{.}00\%$ common stock, $w_d=15\mathrm{.}00\%$ debt, and $w_p=10\mathrm{.}00\%$ preferred stock.

The after$-$tax cost of debt is approximately

The cost of preferred stock is approximately

The cost of common stock is approximately

The WAAC is approximately $.$

Suppose that Mullens will only accept projects with an expected rate of return that exceeds the WAC.