Please, provide step-by-step solutions for better understanding.

8. Sun Products Company (SPC) uses only debt and equity. It can borrow unlimited amounts at an interest rate of 12% so long as it finances at its target capital structure, which calls for 45% debt and 55% common equity. Its last dividend was $2.40, its expected constant growth rate is 5%, and its stock sells for $24. SPC's tax rate is 40%. Four projects are available: Project A has a cost of $240 million and a rate of return of 13%, Project B has a cost of $125 million and a rate of return of 12%, Project C has a cost of $200 million and a rate of return of 11%, and Project D has a cost of $150 2 million and a rate of return of 10%. All of the company's potential projects are independent and equally risky. What is SPC's cost of common equity? a. b. e d. 15.50% 13.40% 7.20 12.50% 16.00