1. The following information is given: - Cost of retained earnings =14% - Cost of new common stock =16% - YTM of bonds is 6% - The amount available in retained earnings =$120 million - Firm's marginal tax rate is 40% - The target capital structure calls for 40% debt and $60% common equity. Draw and label this firm's MCC schedule BREAK POINT =$120MILLION/.6=$200MILLION 1. The following information is given: - Cost of retained earnings =14% - Cost of new common stock =16% - YTM of bonds is 6% - The amount available in retained earnings =$120 million - Firm's marginal tax rate is 40% - The target capital structure calls for 40% debt and $60% common equity. Draw and label this firm's MCC schedule BREAK POINT =$120MILLION/.6=$200MILLION