Thompson Corporation is considering four average-risk projects with the following costs and rates of return: Proiect Cost $2,000 $3,000 S5,000 S2,000 Expected Rate of Return 12 .75% 11 .25% 10.85% 10.25% 4 Thompson Corporation estimates that it can issue debt at a rate of rd-8%, and its tax rate is 35%. Thompson can issue preferred stock for $110 and expects to pay a perpetual constant preferred dividend of $10 per year. Thompson Corp. 's common stock has a beta of 1.3. The risk free rate is 4% and the market risk premium is 8%. The company expects market value weights to be 70% common stock, 15% debt and 15% preferred stock