Check My Work (2 remaining) eBook o o 2 3 4 Problem Walk-Through Adamson Corporation is considering four average-risk projects with the following costs and rates of retur: Project Cost Expected Rate of Return 1 $2,000 16.00% 3,000 15.00 5,000 13.75 2,000 12.50 The company estimates that it can issue debt at a rate of ro - 119, and its tax rate is 25%. It can issue preferred stock that pays a constant dividend of $7,00 per year at $53.00 per share. Also, its common stock currently sells for $45.00 per share; the next expected dividend, Ds, is $5.25; 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. a. What is the cost of each of the capital componenta? Do not round intermediate calculations. Round your answers to two decimal places Cost of debt: Cost of preferred stock: % Cost of retained earnings: % b. What is Adamson's WACC? Do not round intermediate calculations. Round your answer to two decimal places Question 5 of 10 Check My Work (2 remaining) eBook Torch Industries can issue perpetual preferred stock at a price of $55.00 a share. The stock would pay a constant annual dividend of $4.50 a share. What is the company's cost of preferred stock, Fp? Round your answer to two decimal places % o Check My Work (a remaining) Check My Work (2 remaining) LE eBook The Holmes Company's currently outstanding bonds have a 9% coupon and a 13% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is Holmes' after-tax cost of debt? Round your answer to two decimal places. O