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Adamson Corporation is considering four average-risk projectswith the following costs and rates of return: Project Cost ExpectedRate of Return 1 $2,000 16.00% 2 3,000 15.00 3 5,000 13.75 4 2,00012.50 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 thatpays a constant dividend of $5 per year at $45 per share. Also, itscommon stock currently sells for $34 per share; the next expecteddividend, D1, is $4.25; and the dividend is expected to grow at aconstant rate of 4% per year. The target capital structure consistsof 75% common stock, 15% debt, and 10% preferred stock. What is thecost of each of the capital components? Round your answers to twodecimal places. Do not round your intermediate calculations. (Costof debt % Cost of preferred stock % Cost of retained earnings%)What is Adamson's WACC? Round your answer to two decimal places.Do not round your intermediate calculations.
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