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Rick Barr Properties has a target capital structure consisting of 4 0 % debt, 1 0 % preferred stock, and 5 0 % common equity.

Rick Barr Properties has a target capital structure consisting of 40% debt, 10% preferred stock, and 50% common equity. Rick Barr Properties issued 10-year, 7.1% semiannual coupon bonds that sell for $950. Rick Barr Properties also has 1 million preferred shares outstanding with a dividend rate of 9.60%, par value of $100 and selling price of $115. Additionally, Rick Barr Properties has 6 million shares outstanding and is a constant growth firm that expects to pay a dividend of $2.25 on their common stock. Rick Barr Properties common stock currently sells for $27 per share, and has a growth rate of 4%. Flotation costs on new common stock would be 10%, and the firm's marginal tax rate is 25%.
What is Rick Barr Properties' WACC assuming they can use retained earnings to fund their capital budget? Be sure to show each component (rd,rp etc) cost as you calculate WACC.
Which of the following projects below should Rick Barr Prowerties accept? Assume these projects are independent and have similar levels of risk.
Project
Return (IRR).
A 10.5%
B 11%
C 7%
D 13.5%
E 12.5%
F 8%
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