11-27 (Algo) Marginal cost of capital [LO11-5] Delta Corporation has the following capital structure Debt (K) Preferred stock (Kp) Common equity (Ke) (retained earnings) Weighted average cost of capital (Kg) Cost (aftertax) 0.6% Weighted Weights Cost 20% 1.32% 11.2 10 1.12 11.2 70 7.84 10.28% a. If the firm has $49 million in retained earnings, at what size capital structure will the firm run out of retained earnings? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10" Capital structure size (X) million b. The 6.6 percent cost of debt referred to earlier applies only to the first $23 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10" Check my w earnings, at what size capital structure will the firm run out of retained earnings? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10" Capital structure size (X) million b. The 6.6 percent cost of debt referred to earlier applies only to the first $23 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt? Note: Enter your answer in millions of dollars (e.g.. $10 million should be entered as "10". Capital structure size (Z) Search million