Problem 11-27 Marginal cost of capital [LO5] Delta Corporation has the following capital structure: Cost (aftertax) Weights Weighted Cost Debt (Kd) 7.6 % 5 % 0.38 % Preferred stock (Kp) 5.8 15 0.87 Common equity (Ke) (retained earnings) 12.2 80 9.76 Weighted average cost of capital (Ka) 11.01 % a. If the firm has $32 million in retained earnings, at what size capital structure will the firm run out of retained earnings? (Enter your answer in millions of dollars (e.g., $10 million should be entered as "10").) Capital structure size (X) $ million b. The 7.6 percent cost of debt referred to earlier applies only to the first $8 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? (Enter your answer in millions of dollars (e.g., $10 million should be entered as "10").) Capital structure size (Z) $ million rev: 11_12_2014_QC_58992 References WorksheetProblem 11-27 Marginal cost of capital [LO5]