The Atami Corporation finds it necessary to determine its marginal cost of capital. Atami's current capital structure calls for $45$ percent debt, $15$ percent preferred stock, and $40$ percent common equity. Initially, common equity will be retained earnings $(Ke$ and then new common stock $(Kn).$ The costs of the various sources of financing are as follows: debt, $10\mathrm{.}6$ percent; preferred stock, $12\mathrm{.}0$ percent; retained earnings, $12\mathrm{.}0$ percent; and new common stock, $14\mathrm{.}4$ percent.