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, $7\mathrm{.}1\%$ semiannual coupon bonds that sell for $$950.$ Rick Barr Properties also has $1$ million preferred shares outstanding with a dividend rate of $9\mathrm{.}60\%,$ par value of $$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\mathrm{.}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 $10\mathrm{.}5\%$

B $11\%$

C $7\%$

D $13\mathrm{.}5\%$

E $12\mathrm{.}5\%$

F $8\%$