Answer Happy

4. If a firm has the following breakpoints, what order will the financing changes occur in? i.e. which source will run out first, second, and third? Common stock Debt Preferred stock common stock, debt, preferred stock O preferred stock, common stock, debt O preferred stock, debt, common stock O debt, preferred stock, common stock O debt, common stock, preferred stock common stock, preferred stock, debt $125m $95m $150m 5. A firm can issue $22m of debt at 6.5 before it has to increase it's interest rate. It can then issue $4m at 8.3 before it has to increase its interest rate again. What is the second breakpoint on debt? i.e. at what dollar amount would the MCC change? The firm's weight on debt is 48%. $12,321,000 would be entered as 12.32