The company estimates that it can issue debt at a rate of r_d = 11%, and its tax rate is 25%. It can issue preferred stock that pays a constant dividend of $7.00 per year at $50.00 per share. Also, its common stock currently sells for $39.00 per share; the next expected dividend, D₁, is $4.75; 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.

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: %

What is Adamson's WACC? Do not round intermediate calculations. Round your answer to two decimal places.

%

Only projects with expected returns that exceed WACC will be accepted. Which projects should Adamson accept?

Project 1	-Select-AcceptRejectItem 5
Project 2	-Select-AcceptRejectItem 6
Project 3	-Select-AcceptRejectItem 7
Project 4	-Select-AcceptRejectItem 8