Marginal Incorporated (MI) has determined that its before-tax cost of debt is 10.0%. Its cost of...

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Marginal Incorporated (MI) has determined that its before-taxcost of debt is 10.0%. Its cost of preferred stock is 11.0%. Itscost of internal equity is 14.0%, and its cost of external equityis 18.0%. Currently, the firm's capital structure has $470 millionof debt, $150 million of preferred stock, and $380 million ofcommon equity. The firm's marginal tax rate is 25%. The firm iscurrently making projections for the next period. Its managers havedetermined that the firm should have $92 million available fromretained earnings for investment purposes next period. What is thefirm's marginal cost of capital at a total investment level of $358million?

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Marginal Incorporated (MI) has determined that its before-taxcost of debt is 10.0%. Its cost of preferred stock is 11.0%. Itscost of internal equity is 14.0%, and its cost of external equityis 18.0%. Currently, the firm's capital structure has $470 millionof debt, $150 million of preferred stock, and $380 million ofcommon equity. The firm's marginal tax rate is 25%. The firm iscurrently making projections for the next period. Its managers havedetermined that the firm should have $92 million available fromretained earnings for investment purposes next period. What is thefirm's marginal cost of capital at a total investment level of $358million?