Flotation costs and market pressure as shown in Table 1.^1 The cost of debt will not be affected by the amount of debt used, nor will the flotation cost for preferred. How could this information be used when estimating the cost of common equity? PNC's target capital structure calls for 15% debt, 2% preferred stock, and 83% common equity, all taken at market value. Assuming that new capital is raised in these percentages and that all common equity is raised as retained earnings, what is PNC's WACC? Assuming that PNC will have $2.4 million of new retained earnings during the coming year and that all capital is raised in accordance with the target capital structure, how large could the capital budget be before the firm is required to sell new common stock to finance the capital budget? (b) What would the WACC be at each of these total capital budgets: $2 million, $6 million, $10 million, $20 million, and $40 million? The percentage fee increases because the bankers will have an increasingly difficult time selling larger amounts of stone of the stock will decline as the supply increases, at least while the issue is being sold. Flotation costs and market pressure as shown in Table 1.^1 The cost of debt will not be affected by the amount of debt used, nor will the flotation cost for preferred. How could this information be used when estimating the cost of common equity? PNC's target capital structure calls for 15% debt, 2% preferred stock, and 83% common equity, all taken at market value. Assuming that new capital is raised in these percentages and that all common equity is raised as retained earnings, what is PNC's WACC? Assuming that PNC will have $2.4 million of new retained earnings during the coming year and that all capital is raised in accordance with the target capital structure, how large could the capital budget be before the firm is required to sell new common stock to finance the capital budget? (b) What would the WACC be at each of these total capital budgets: $2 million, $6 million, $10 million, $20 million, and $40 million? The percentage fee increases because the bankers will have an increasingly difficult time selling larger amounts of stone of the stock will decline as the supply increases, at least while the issue is being sold