2. When the company exhausts its retained earnings, equity will have to be raised as new commons stock; flotation costs will cause the cost of equity to rise (a breakpoint). Are there similar breakpoints in the costs of other forms of capital. For example, does the cost of debt rise as the company borrows more and more? And if so, what affect does that have on the overall WACC? If you were to graph the cost of capital (the y-axis) as a function of the amount of capital raised (the x-axis), what would that graph look like?