a & b

The company estimates that it can issue debt at a rate of rd=10%, and its tax rate is 40%. It can issue preferred stock that pays a constant dividend of $6 per year at $46 per share. Also, its common stock currently sells for $30 per share; the next expected dividend, D2 is $3.75; and the dividend is expected to grow at a constant rate of 4% 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 to answer the questions below. 20 oject acceptance analysis: 35 oject acceptance analysis: a. What is the cost of each or the capital components? Round your answers to two decimal places. Do not round your intermediate calculations. b. What is Adamson's WACC? Round your answer to two decimal places. Do not round your intermediate calculations. (3) % c. Only projects with expected retums that exceed WACC will be accepted. Which projects should Adamson accept? Project 1 Project 2 Project 3 Project 4