Lebron James Industries Inc. has the following capital.

Debt: The firm issued 900 25-year bonds five years ago which were sold at a par value of $1000. The bonds carry a coupon rate of 7%, but are currently selling to yield new buyers 10%.

Preferred stock: 3500 shares of 8% preferred were sold 12 years ago at a par value of $50. They're now priced to yield 11%.

Equity: The firm got started with the sale of 10000 shares of common stock at $100 per share. Since that time earnings of $800000 have been retained. The stock is now selling for $89. Whitley's business plan for next year projects net income of $300000, half of which will be retained.

The firm's marginal tax rate is 37% including federal and state obligations. It pays flotation costs of 11% on all new stock issues. Whitley is expected to grow at a rate of 3.5% indefinitely and recently paid an annual dividend of $4. Assume that the coupon payments are semi-annual.

1 Develop Whitley's WACC before the retained earnings break. Round the answer to two decimal places. Do not round your intermediate calculations. Enter numbers only; do not include the "%".

2 Develop Whitley's WACC after the retained earnings break. Round the answer to two decimal places. Do not round your intermediate calculations. Enter numbers only; do not include the "%".

3 Indicate how much capital will have been raised when the break occurs. Round your answer to the nearest dollar. Do not round your intermediate calculations. Enter numbers only; do not include the "$" or commas.