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The company estimates that it can issue debt at o rate of re=11%, and its tax rate is 2.5%. It can lssue preferred stock that

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The company estimates that it can issue debt at o rate of re=11%, and its tax rate is 2.5%. It can lssue preferred stock that pays a canstant dividend of 36.00 per year at S45. $0 oer share. Also, its cominon stock currentiv seils for $32.00 per share; the neat expected dividend, D1 is $3.75; and the dividend is expected to grow at a constant rate of A 4 per Year. The target capital structure consists of 75% comrion stock, 15% debt, and 10% preferred stock. a. What is the cot of each of the capital components? Do not round intermediate calculations. Round your antwens to two decimal placer. Cost of dett: Cost of preferted msoks Cost of retained eamings: b. What is Adsenson's WACC? DS not rourd intermed ate caloulations. Round your answer to tes decimal places C-Only ocosets with exsected returns that erceed WACc will be sccepted. Which projects thould Adamson accept

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