E) decline, rise, or not change. Decline, rise or not change. G) increases, decreases, or does not alter.

of a conservative firm has adopted a policy of never letting debt exceed 40 peroent of total financing. The fiem will earn $18,000,000 but distribute 50 percent in dividends, so the firm will have The firm raises funds in increments of $3,600,000 consisting of $720,000 in debt and $2,880,000 in equity. This strategy maintains the capital structure of 20 percent debt and 80 percent equity. Develop marginal cost of capital schedule through $12,000,000. Round your answers for the break-points to the nearest dollar and for the marginal costs to one decimal place. What impact would each of the following have on the marginal cost of capital schedule? e. the firm's income tax rate increases If income tax rates were to rise, the effective cost of debt would Selet and the marginal cost of capital would Selecttll evels f. the firm retains all of its earnings and the price of the stock is unaffected. Round your answers for the break point to the nearest dollar and for the marginal costs to one decimal place The marginal cost of capital schedule cost of debt: cost of equity: cost of capital: cost of debt: cost of equity: cost of capital: above cost of debt: cost of equity: cost of capital: 0 $12,000,000 is insufficient to meet attractive Investment opportunities the marginal cost of capital schedule. If the firm needs more than $12,000,000 that fact Select