# Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at...

###### Question:

Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 10% as long as it finances at its target capital structure, which calls for 40% debt and 60% common equity. Its last dividend (Do) was $2.00, its expected constant growth rate is 4%, and its common stock sells for$26. EEC's tax rate is 25%. Two projects are available: Project A has a rate of return of 13%, and Project B's return is 10%. These two projects are equally risky and about as risky as the firm's existing assets. a. What is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. b. What is the WACC? Do not round intermediate calculations. Round your answer to two decimal places. % c. Which projects should Empire accept? -Select-

#### Similar Solved Questions

##### What do we mean by provider profiling? What are some of the important principles in provider profiling? What are some of...
What do we mean by provider profiling? What are some of the important principles in provider profiling? What are some of the problems that can occur with profiling, and how might a plan address those?...
##### 1)2) 3) Required information The following information applies to the questions displayed below. The following financial...
1)2) 3) Required information The following information applies to the questions displayed below. The following financial statements and additional information are reported IKIBAN INC Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid ...
##### How do you prove sinhx +coshx=e^x?
How do you prove sinhx +coshx=e^x?...
##### So lost!!!!! Help! Problem: Assume that a 1.00 kg ball is thrown solely by the action of the forearm, which rotates ab...
So lost!!!!! Help! Problem: Assume that a 1.00 kg ball is thrown solely by the action of the forearm, which rotates about the elbow joint under the action of the triceps muscle, as shown in the figure. the ball is accelerated uniformly from rest to 10.0 m/s in .350 s, at which point it is released. ...
##### Write a command to locate all lines in bashrc that have [ and ] in them...
Write a command to locate all lines in bashrc that have [ and ] in them (meaning, find all brackets that may have zero or more characters between them). For this, you want to locate a [, any character(s) and a ]. Remember that “any character” is found with . and to locate any number of t...
##### If the taxpayer purchased a home in 2008, still live in it as their main home...
If the taxpayer purchased a home in 2008, still live in it as their main home and took the First-time Homebuyers Credit, which of the following is true for 2018? a. They must file Form 5405 and make the annual installment payments on line 60b, Schedule 4. b. No Form 5405 is needed, enter the...
##### The Pauli Exclusion Principle states that at most two electrons can be in a given orbital...
The Pauli Exclusion Principle states that at most two electrons can be in a given orbital at one time, this leads to a fourth number, ms, the spin quantum number. This fourth number indicates that an electron has a "spin" of either -1/2 or +1/2. The result of this number is that location of ...
##### Air resistance depends on what factors?
Air resistance depends on what factors?...
##### What is an owlet sock monitor? how does it work? what are advantages and disadvantages? why...
what is an owlet sock monitor? how does it work? what are advantages and disadvantages? why should parents use it? is it safe?...