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 25% debt and 75% common equity. its last dividend (d0) was $2.35, its expected constant growth rate is 4%, and its common stock sells for $23. eec's tax rate is 40%. two projects are available: project a has a rate of return of 13%, and project b's return is 9%. these two projects are equally risky and about as risky as the firm's existing assets. a. what is its cost of common equity? round your answer to two decimal places. do not round your intermediate calculations. b. what is the wacc? round your answer to two decimal places. do not round your intermediate calculations. c. which projects should empire accept?

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?