WACClong dashBook weightsRidge Tool has on its books the amounts and specific (after-tax) costs shown in the following table for each source of capital: Source of capital Book value Individual cost Long-term debt $700 comma 000700,000 7.97.9% Preferred stock $60 comma 00060,000 11.211.2% Common stock equity $450 comma 000450,000 16.816.8% a. Calculate the firm's weighted average cost of capital using book value weights. b.Explain how the firm can use this cost in the investment decision-making process. A. The WACC is the rate of return that the firm must not exceed on long-term projects to maintain the value of the firm. The cost of capital can be compared to the return for a project to determine whether the project is acceptable. B. The WACC is the rate of return that the firm must receive on short-term projects to maintain the value of the firm. The cost of capital can be compared to the dollar value for a project to determine whether the project is acceptable. C. The WACC is the rate of return that the firm must exceed on long-term projects to maintain the value of the firm. The cost of capital can be compared to the dollar value for a project to determine whether the project is acceptable. D. The WACC is the rate of return that the firm must receive on long-term projects to maintain the value of the firm. The cost of capital can be compared to the return for a project to determine whether the project is acceptable