1. The target capital structure of the firm is: Add the following items to your information set above: a) Projected retained earnings are $6 million b) All bonds can be raised at 10% YTM. The applicable tax rate is 40%. c) An unlimited amount can be raised through preferred at 12% yield to investors ( f=5% ) d) Common stock: expected long-term growth is 6%,D0 is $2, the current stock price is $20.00. e) The floatation cost for new common stocks is 10%. A. Show the breaking points below: Breaking Points $ Because of the increase in this component cost B. Show your component cost computation and fill in the blanks below: Kb is: Kps is: KRE is: Kncs is: C. Show below your WACC computation for each interval (use the market value weight you computed above) by filling in the blanks in the table: D. MCC Schedule