OThe Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, prefe of these components, are used to calculate the firm's weighted average cost of capital (WACC), If the firm will not have to issue ne common stock, then the cost of retained earnings is used in the firm's WACC calculation. However, if the firm wil have to issue new comman stock, the cost of new common should be used in the firm's WACC calculation that its target capital structure for raising funds in the future for its capital budget wi-consist of 40% debt, 5% preferred stock firm's cost of preferred stock, r, is ,4% and the nrms nd 12.58% for new equity, fe, what is the firm's weighted average cost of capital (WACC) if it uses retained earnings as its source of common 55% common equity. Note that the firm's marginal tax rate is 40%. Assume that t equity is 11.9% for old equity, r, a equity? Round your answer to 3 decimal places. Do not round intermediate calculations. he firm's cost of debt. re. is 7.9%, the s weighted average cost of capital (WACC2) If it has to issue new common stock? Round your answer to 3 decimal places. Do not round intermediate calculations. 1% Industries is considering two projects for inclusion in its capital budget, and you have been asked to dot uantitative Problem: Bellinger flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all ine have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 7%. Project A 1,130 680 Project B 1,130 280 335 270 240 390 290 740 What is Project A's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations If the projects were independent, which project(s) would be accepted? -Select- If the projects were mutually exclusive, which projectts) would be accepted? Select