9 First find the rs by taking the average of the two Rs methods of information provided. Then find the Re using the floation cost.Next, find the dollar amount where the Retained Earnings break point occurs, then find the WACC that occurs before that dollar amount and the WACC that occurs afterward.

Risk free= 3%

Rm = 12%

Beta = 1.5

RE = $1 million

D1 = $10

G = 6.4%

Po = $100

Floatation cost of new stock = 10%

Rd = 10%

T = 40%

Wd = 30%

Wc = 70%