Q2. The following information is given: - Cost of retained earnings =14% - Cost of new common stock =16% . YTM of bonds is 6% for up to $100 million but goes up to 7% if more than $100 million of new debt is issued. - An unlimited amount can be raised through preferred stock at 10% yield to investors (floatation cost =5% ) - The amount available in retained earnings =$120 million - Firm's marginal tax rate is 40% - The target capital structure calls for 40% debt, 10% preferred, and 50% common equity. A. Show the breaking points below: . Show your component cost computation and fill in the blanks below: K is (are): Ku is: KRE is Kis is: c. Show below your WACC computation for each interval (use the market value weight you computed above) by filling in the blanks in the table: D. MCC Schedule Q2. The following information is given: - Cost of retained earnings =14% - Cost of new common stock =16% . YTM of bonds is 6% for up to $100 million but goes up to 7% if more than $100 million of new debt is issued. - An unlimited amount can be raised through preferred stock at 10% yield to investors (floatation cost =5% ) - The amount available in retained earnings =$120 million - Firm's marginal tax rate is 40% - The target capital structure calls for 40% debt, 10% preferred, and 50% common equity. A. Show the breaking points below: . Show your component cost computation and fill in the blanks below: K is (are): Ku is: KRE is Kis is: c. Show below your WACC computation for each interval (use the market value weight you computed above) by filling in the blanks in the table: D. MCC Schedule