Question 2 (CORPORATE FINANCE). Linda's Drive-through Lumber Express has a target capital structure of 60% common stock, 30\% debt and 10% preferred stock. The cost for retained earnings is 15% and the cost of new or external equity is 16%. Linda's Lumber expects to have \$20 million of retained earnings available. Linda can sell \$15 million of firstmortgage bonds with an after-tax cost of 9%. The firm's bankers feel the company can sell $10 million of debentures with a cost of 9.5% after-tax. Additional debt would cost 10% after-tax. The cost of preferred stock is 14%. What is the firm's marginal cost of capital at each of the following total investment levels? i. Total investment level of $30 million? ii. Total investment level of \$40million? iii. Total investment level of \$80milion? iv. Total investment level of \$100milion? Question 2 (CORPORATE FINANCE). Linda's Drive-through Lumber Express has a target capital structure of 60% common stock, 30\% debt and 10% preferred stock. The cost for retained earnings is 15% and the cost of new or external equity is 16%. Linda's Lumber expects to have \$20 million of retained earnings available. Linda can sell \$15 million of firstmortgage bonds with an after-tax cost of 9%. The firm's bankers feel the company can sell $10 million of debentures with a cost of 9.5% after-tax. Additional debt would cost 10% after-tax. The cost of preferred stock is 14%. What is the firm's marginal cost of capital at each of the following total investment levels? i. Total investment level of $30 million? ii. Total investment level of \$40million? iii. Total investment level of \$80milion? iv. Total investment level of \$100milion