The WACC is used at the discount rete to evaluate various copital budgeting projecti. However, it is important to reeize that the wace is an oppropeiste discount rate only for a propet of averege, risk: Analyre the cost of capital situations of the following company cases, ond antwer the specic questions that finance professionats need to addreis. Consider the case of Turmbuli co. ins cost of preferred stock is 12.244. If Tumbull car raise all of iss equity capital from retained eamings, its cost of common equity wai be 14,7 , Howtve, if it ia necessery to rase naw comman equity, it will carry a cout of 16.0%. decimal places.) 0.68w 0.75 ai 1.03% 0.95%