Village Enterprises' CFO is reviewing 4 projects with the same average risk and the data shown below Project Investment Expected Return $2,000 16% $3,000 15% C $5,000 13.75% D $2,000 12.5% The CFO thinks that Village Enterprises (VE) can issue debt at 10%, preferred stock at $49 per share with a $5 annual dividend. Its common stock trades at $36 per share and he expects the next dividend to be $3.50 and grow at a constant rate of 6% VE's tax rate is 25% and the CFO's target capital structure is 15% debt, 10% preferred and 75% equity 1 2 What is the cost of each capital component? What is VE'S WACC? Which projects should the CFO accept? 3