What is the WACC breakpoint formula? A companys capital structure consists of 25 percent debt and 75 percent common equity. They can issue up to $250,000 in new debt at a 4 percent cost; for new debt greater than $250,000, the cost is 5.5 percent. They expect to generate $600,000 in retained earnings this year. Compute the WACC breakpoint(s) associated with raising new funds. No cost of equity for WACC calculations needed. The breakpoint of retained earnings equals (=) amount of retained earnings divided by the weight of equity.