$15.($Cost of capital schedule$-$one break point$)$ A company plans to raise new capital as follows: Bonds Payable: Cost $9\mathrm{.}0\%,$ Proportion $35\%,$ Preferred Stock: Cost $15\mathrm{.}5,$ Proportion $15,$ Common Stock $($retained earnings$)$: Cost $17\mathrm{.}5,$ Proportion $50,$ Total Liabilities$+$Equity$=100\%.$ The firm forecasts it can retain $$1$ million of new earnings. If it requires additional common equity, it will sell a new issue of common stock at a cost of $18\mathrm{.}5\%.$ A$.$ Calculate the companys WACC using new retained earnings as the equity source B$.$ Locate the break point in the cost of capital schedule due to running out of new retained earnings C$.$ Calculate the companys WACC after it substitutes the new stock issue for retained earnings. $17.($Cost of capital schedule$-$multiple break points$)$ The firm of Problem $15$ also forecasts the following: $(1)$ if it sells more than $$250,000$ of bonds, the cost of bond financing will rise to $10\mathrm{.}0\%,$ and $(2)$ if it sells more than $$400,000$ of preferred stock, the cost of preferred$-$stock financing will rise to $16\mathrm{.}5\%.$ A$.$ Calculate the break point caused by running out of the cheaper bond financing B$.$ Calculate the break point caused by running out of the cheaper preferred$-$stock financing C$.$ Calculate the WACC in each interval