0/10 Video Submit Excel Online Structured Activity: WACC and optimal capital budget return Adamson Corporation is considering four average-risk projects with the following costs and rates Expected Rate Project Cost Return 16.00% 1 $2.000 3,000 15.00 5,000 13.75 4 2,000 12.50 The company estimates that It can Issue debt at a rate of r 9% , and Its tax rate Is 35%. It can Issue preferred stock that pays a constant dividend of $6 per year at $50 per share. Also, its common stock currently sells for $31 per share; the next expected dividend, D1, is $3.00; and the dividend is expected to grow at a constant rate of 7% per year . The target capital structure consists of 75% common stock, 15% debt, and 10 % preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis t answer the questions below. Current score 0/10 pts (0 %) 1561784340000 Back Next 0/10 a. What is the cost of each of the capital components? Round your answers to two decimal places. Do not round your intermediate calculations Submit Cost f debt f preferred stock Cost Cost of retained earnings b. What is Adamson's WACC? Round your answer to two decimal places. Do not round your intermediate calculations. c. Only projects with expected returns that exceed WACC will be accepted. Which projects should Adamson accept? Project 1 Project 2 Project 3 T Project 4 Current score 15617944c 0 Back Next