Answer Happy

5 wak Check my work Problem 11-27 Marginal cost of capital [LO11-5] Delta Corporation has the following capital structure: Cost Weighted Cost (aftertax) Weights Debt (Kg) 6.65 1.32% 20% 10 Preferred stock (Kp) 11.2 Common equity (Ke) (retained earnings) 1.12 7.84 11.2 70 weighted average cost of capital (Kg) 10.28% a. If the firm has $49 million in retained earnings, at what size capital structure will the firm run out of retained earnings? (Enter your answer in millions of dollars (e.g.. $10 million should be entered as "10").) Capital structure size (X) milion ***
b. The 6.6 percent cost of debt referred to earlier applies only to the first $23 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt? (Enter your answer in millions of doilars (e.g., $10 million should be entered as "10").) Capital structure size (Z) million