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Question 4 (1 point) Marginal Incorporated (MI) has determined that its before-tax cost of debt is 10.0%. Its cost of preferred stock is 11.0%. Its

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Question 4 (1 point) Marginal Incorporated (MI) has determined that its before-tax cost of debt is 10.0%. Its cost of preferred stock is 11.0%. Its cost of internal equity is 14.0%, and its cost of external equity is 18.0%. Currently, the firm's capital structure has $470 million of debt, $150 million of preferred stock, and $380 million of common equity. The firm's marginal tax rate is 25%. The firm is currently making projections for the next period. Its managers have determined that the firm should have $92 million available from retained earnings for investment purposes next period. What is the firm's marginal cost of capital at a total investment level of $358 million? 10.50% 12.02% O 11.26% 13.19% 11.67% Marginal Incorporated (MI) has determined that its after-tax cost of debt is 4.0% for the first $48 million in bonds it issues, and 8.0% for any bonds issued above $48 million. Its cost of preferred stock is 12.0%. Its cost of internal equity is 17.0%, and its cost of external equity is 20.0%. Currently, the firm's capital structure has $285 million of debt, $65 million of preferred stock, and $150 million of common equity. The firm's marginal tax rate is 35%. The firm's managers have determined that the firm should have $63 million available from retained earnings for investment purposes next period. What is the firm's marginal cost of capital at a total investment level of $147 million? 10.52% 12.12% 8.94% 9.84% 11.22% 9.62% 8.1496 9.04% Question 6 (2 points) Marginal Incorporated (MI) has determined that its before-tax cost of debt is 5.0% for the first $62 million in bonds it issues, and 7.0% for any bonds issued above $62 million. Its cost of preferred stock is 12.0%. Its cost of internal equity is 15.0%, and its cost of external equity is 19.0%. Currently, the firm's capital structure has $325 million of debt, $ 70 million of preferred stock, and $105 million of common equity. The firm's marginal tax rate is 45%. The firm's managers have determined that the firm should have $50 million available from retained earnings for investment purposes next period. What is the firm's marginal cost of capital at a total investment level of $38 million? 8.92% 8.17% 7.33% 7.46% 10.22% 9.38% 8.08% 6.62%

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