Back to Assignment Autempis Keep the Highest / 8 10. Problem 10.18 (WAcC and Optimal Capital Budget) Adamson Corporation is considering four average-risk projects with the following costs and rates of return: \begin{tabular}{ccc} Project & Cost & Expected Rate of Return \\ \hline 1 & $2,000 & 16,00% \\ 2 & 3,000 & 15.00 \\ 3 & 5,000 & 13.75 \\ 4 & 2,000 & 12,50 \end{tabular} The company estimates thet it cen iscue debt at a rate of rd=9%, and its tax rate is 25%. It can issue preferred stock thet pays a constant dividend of $6.00 per year at 359.00 per share. Also, its commen stock currently sels for $51.00 per share; the next expected dividend, D1, is $5.25; and the dividend is expected to grow at a constant rate of 6% per year: The terget capital structure consists of 75% common stock, 15% debt, and 10% preferred stock. a. What is the cost of each of the captal components? Do not round intermediate calculations. Round your answers to two dedmal places. Cost of debt: W Cost of preferred stockt W Cost of retained eamings: b. What is Adamson's WACC? Do not round intermediate calculations. Round your answer to two decimal places. c. Only projects with expected returns that exceed WACC will be accepted. Which projects should Adamson accegt