o Cost 1 16.00% 2 3 4 Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project Expected Rate of Return $2,000 3,000 15.00 5,000 13.75 2,000 12.50 The company estimates that it can issue debt at a rate of ra = 11%, and its tax rate is 25%. It can issue preferred stock that pays a constant dividend of $5.00 per year at $53.00 per share. Also, its common stock currently sells for $47.00 per share; the next expected dividend, Da, is $5.75; and the dividend is expected to grow at a constant rate of 4% 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? % -Select- Select Project 1 Project 2 Project 3 Project 4 -Select- -Select- o Cost 1 16.00% 2 3 4 Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project Expected Rate of Return $2,000 3,000 15.00 5,000 13.75 2,000 12.50 The company estimates that it can issue debt at a rate of ra = 11%, and its tax rate is 25%. It can issue preferred stock that pays a constant dividend of $5.00 per year at $53.00 per share. Also, its common stock currently sells for $47.00 per share; the next expected dividend, Da, is $5.75; and the dividend is expected to grow at a constant rate of 4% 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? % -Select- Select Project 1 Project 2 Project 3 Project 4 -Select- -Select