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he Noian Corporation finds it is necessary to determine its marginal cost of capital. Nolan's current capital structure calis for 30 ercent debt, 20 percent

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he Noian Corporation finds it is necessary to determine its marginal cost of capital. Nolan's current capital structure calis for 30 ercent debt, 20 percent preferred stock, and 50 percent common equity. Initally, common equity will be in the form of retained arnings (Ke) and then new common stock (Kn). The costs of the vanlous sources of financing are as follows. debt (after-tax), 8.4 ercent, preferred stock, 10 percent, retained earnings, 12 percent, and new common stock, 13.2 percent 2. What is the intial weighted average cost of capitai? (include debt, preferred stock, and common equity in the form of retained earnings, Ke ) Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. b. If the firm has $36 milion in retained earnings, at what size capital structure wal the firm run out of retained earnings? Note: Enter your answer in mililons of dollars (e.g., $10 mililon should be entered os " 10). c. What wil the marginal cost of capital be immediately after that point? (Equity will remain at 50 percent of the capital structure, but Will all be in the form of new common stock, Kn ) Note: Do not round intermediate calculations. Input your answer os a percent rounded to 2 decimal places. d. The 8.4 percent cost of debt referred to earier applies only to the first $33 million of debt. After that, the cost of debt will be 10 4 percent. At what size capital structure will there be a change in the cost of debt? Note: Enter your onswer in milions of dollars (e.g. $10 million should be entered os "10"). e. What wil the margunal cost of capital be immediately after that point? (Consider the facts in both parts c and d ) Note: Do not round intermediate colculotions. Input your answer os a percent rounded to 2 decimal places

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