Question 5 (2 points) Marginal Incorporated (MI) has determined that its after-tax cost of debt is 6.0% for the first $99 million in bonds it issues, and 10.0% for any bonds issued above $99 million. Its cost of preferred stock is 13.0%. Its cost of internal equity is 17.0%, and its cost of external equity is 19.0%. Currently, the firm's capital structure has $325 million of debt, $35 million of preferred stock, and $140 million of common equity. The firm's marginal tax rate is 45%. The firm's managers have determined that the firm should have $71 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 $76 million? 8.38% 12.73% 12.17% 10.13% 9.81% 9.25% 7.82% 9.57% Question 6 (2 points) Marginal Incorporated (MI) has determined that its before-tax cost of debt is 5.0% for the first $198 million in bonds it issues, and 8.0% for any bonds issued above $198 million. Its cost of preferred stock is 11.0%. Its cost of internal equity is 16.0%, and its cost of external equity is 20.0%. Currently, the firm's capital structure has $310 million of debt, $30 million of preferred stock, and $160 million of common equity. The firm's marginal tax rate is 35%. The firm's managers have determined that the firm should have $73 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 $137 million? 9.00% 10.28% 9.08% 7.80% 12.02% 10.16% 8.88% 10.74%