Problem 11-27 (Algo) Marginal cost of capital [LO11-5] Delta Corporation has the following capital structure: Debt (Kd) Preferred stock (Kp) Common equity (Ke) (retained earnings) Weighted average cost of capital (Ka) Cost (aftertax) 8.2% Weights Weighted Cost 30% 2.46% 7.5 10 0.75 13.5 60 8.10 11.31% a. If the firm has $30 million in retained earnings, at what size capital structure will the firm run out of retained earnings? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10". Capital structure size (X) million b. Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10". The 8.2 percent cost of debt referred to earlier applies only to the first $15 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt? Capital structure size (Z) million