Matsumoto Limited (ML), a large conglomerate firm, has a capital structure that currently consists of 30 percent long-term debt, 10 percent preferred stock, and 60 percent common equity. ML has determined that it will raise funds in the future using 50 percent long-term debt, 10 percent preferred stock, and 40 percent common equity. ML can raise up to $80 million in the long-term debt market at a pretax cost of 15 percent. Beyond $80 million, the pretax cost of long-term debt is expected to increase to 17 percent. Preferred stock can be raised at a cost of 19 percent. The limited demand for this security permits ML to sell only $23 million of preferred stock. MLs marginal tax rate is 40 percent. MLs stock currently sells for $23 per share and has a beta of 1.2. ML pays no dividends and is not expected to pay any dividends for the foreseeable future. Investment advisory services expect the stock price to increase from its current level of $23 per share to a level of $64.75 per share at the end of 5 years. New shares can be sold to net the company $22.09. ML expects earnings after taxes and available for common stockholders to be $50 million. Compute the marginal cost of capital schedule for ML, and determine the break points in the schedule. Use Table II to answer the questions. Round your answers for break points to the nearest dollar. Round your answers for weighted marginal cost of capital to two decimal places. Enter your answer in whole dollar. For example, an answer of $1.20 million should be entered as 1,200,000, not 1.20.

Break point $ - Weighted marginal cost of capital %

$ %

$ %

$ %