ignore the very last question about the impact of marginal cost...

Problem 21-06 The management of a conservative firm has adopted a policy of never letting debt exceed 30 percent of total financing. The firm will earn $18,000,000 but distribute 40 percent in dividends, so the firm will have $10,800,000 to add to retained earnings. Currently the price of the stock is $60; the company pays a $2 per share dividend, which is expected to grow annually at 11 percent. If the company sells new shares, the net to the company will be $58. Given this information, what is the a. cost of retained earnings? Round your answer to one decimal place. % b. cost of new common stock? Round your answer to one decimal place. % The rate of interest on the firm's long-term debt is 10 percent and the firm is in the 32 percent income tax bracket. If the firm issues more than $2,900,000, the interest rate will rise to 11 percent. Given this information, what is the C. cost of debt? Round your answer to one decimal place. % d. cost of debt in excess of $2,900,000? Round your answer to one decimal place. % The firm raises funds in increments of $2,500,000 consisting of $750,000 in debt and $1,750,000 in equity. This strategy maintains the capital structure of 30 percent debt and 70 percent equity. Develop the 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. The marginal cost of capital schedule: SO - $ cost of debt: % % cost of equity: cost of capital: % $ S cost of debt: % % cost of equity: cost of capital: % above $ cost of debt: % % cost of equity: cost of capital: % What impact would each of the following have on the marginal cost of capital schedule? Problem 21-06 The management of a conservative firm has adopted a policy of never letting debt exceed 30 percent of total financing. The firm will earn $18,000,000 but distribute 40 percent in dividends, so the firm will have $10,800,000 to add to retained earnings. Currently the price of the stock is $60; the company pays a $2 per share dividend, which is expected to grow annually at 11 percent. If the company sells new shares, the net to the company will be $58. Given this information, what is the a. cost of retained earnings? Round your answer to one decimal place. % b. cost of new common stock? Round your answer to one decimal place. % The rate of interest on the firm's long-term debt is 10 percent and the firm is in the 32 percent income tax bracket. If the firm issues more than $2,900,000, the interest rate will rise to 11 percent. Given this information, what is the C. cost of debt? Round your answer to one decimal place. % d. cost of debt in excess of $2,900,000? Round your answer to one decimal place. % The firm raises funds in increments of $2,500,000 consisting of $750,000 in debt and $1,750,000 in equity. This strategy maintains the capital structure of 30 percent debt and 70 percent equity. Develop the 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. The marginal cost of capital schedule: SO - $ cost of debt: % % cost of equity: cost of capital: % $ S cost of debt: % % cost of equity: cost of capital: % above $ cost of debt: % % cost of equity: cost of capital: % What impact would each of the following have on the marginal cost of capital schedule