Business
Business, 28.11.2019 04:31, shongmadi77

Adams corporation is considering four average-risk projects with the following costs and rates of returnproject ( $2,000, expected rate of return--16.00%project ( $3,000, expected rate of return--15.00%project (--$5,000, expected rate of return--13.75%project ( $2,000, expected rate of return--12.50%the company estimates that it can issue debt at a rate of rd = 10%, and its tax rate is 30%. it can issue preferred stock that pays a constant dividend of $3 per year at $40 per share. also, its common stock currently sells for $30 per share, the next expected dividend, d1, is $3.25, 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. what is the cost of each of the capital components? round your answer to two decimal places. a. cost of %b. cost of preferred stock %c. cost of retained earnings %d. what is adams' wacc? round your answer to two decimal %

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