Question: this is 1 question, please answer 11. Problem 10.18 (WACC and optimal Capital Budget) Adamson Corporation is contidening four aversge-risk projects with the following costs

this is 1 question, please answer  this is 1 question, please answer 11. Problem 10.18 (WACC and
optimal Capital Budget) Adamson Corporation is contidening four aversge-risk projects with the

11. Problem 10.18 (WACC and optimal Capital Budget) Adamson Corporation is contidening four aversge-risk projects with the following costs and rates of raturn: The compeny estimntes thint it can iseve debt at a rate of fd=10%6, and its tax rate is 25%. It can issue praferred stock that paya s constant dividend of 36. be per yesr at 557.00 per share. Nso, its common stock curtently sells for 544.00 per share; the next expected dividend, Dr. is s4.25; and the dividend is expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common stock, 15 in deot, and 1091 . prelerred stock. 3. What is the cost of each of the copital components? Do not round intermediate calculations. Round your answers to tws decimal placen. Cost of debt- Ch 10: End-of-Chapter Problems - The Cost of Capital The company estimates that it can issue debt at a rate of rd=10%, and its tox rate is 25%. It can issue preferred stock that pays a constant dividend $6.00 per year at $57.00 per share. Also, Its common stock currently sells for $44.00 per share; the next expected dividend, D, is $4.25; and the dividend is expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common stock, 15% debt, and 10% prefarred stock. a. What is the cost of each of the copital components? Do not round intermediate calculations. Round your answers to two decimal places. Cost of debt: Cost of preferred stock: b. Whot 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 accept? Project 1 Project 2 Project 3 Project 4

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