The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 16%, its before-tax cost of debt is 11%, and its marginal tax rate is 25%. Assume that the firm's long-term debt sells at par value. The firms total debt, which is the sum of the companys short-term debt and long-term debt, equals $1,143. The firm has 576 shares of common stock outstanding that sell for $4.00 per share.

Assets			Liabilities And Equity
Cash	$ 120		Accounts payable and accruals	$ 10
Accounts receivable	240		Short-term debt	53
Inventories	360		Long-term debt	1,090
Plant and equipment, net	2,160		Common equity	1,727
Total assets	$2,880		Total liabilities and equity	$2,880

Calculate Paulson's WACC using market-value weights. Do not round intermediate calculations. Round your answer to two decimal places.

%

2.) Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at r_d = 11%, and its common stock currently pays a $2.75 dividend per share (D₀ = $2.75). The stock's price is currently $26.75, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 25%, and its WACC is 14.65%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.

3.)Adamson Corporation is considering four average-risk projects with the following costs and rates of return:

Project	Cost		Expected Rate of Return
1	$2,000		16.00%
2	3,000		15.00
3	5,000		13.75
4	2,000		12.50

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 $5.00 per year at $47.00 per share. Also, its common stock currently sells for $41.00 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