The Nolan Corporation finds it is necessary to determine itsmarginal cost of capital. Nolan’s current capital structure callsfor 30 percent debt, 20 percent preferred stock, and 50 percentcommon equity. Initially, common equity will be in the form ofretained earnings (Ke) and then new common stock (Kn). The costs ofthe various sources of financing are as follows: debt (after-tax),7.6 percent; preferred stock, 7 percent; retained earnings, 13percent; and new common stock, 14.2 percent. a. What is the initialweighted average cost of capital? (Include debt, preferred stock,and common equity in the form of retained earnings, Ke.) (Do notround intermediate calculations. Input your answers as a percentrounded to 2 decimal places.) b. If the firm has $14 million inretained earnings, at what size capital structure will the firm runout of retained earnings? (Enter your answer in millions of dollars(e.g., $10 million should be entered as "10").) c. What will themarginal cost of capital be immediately after that point? (Equitywill remain at 50 percent of the capital structure, but will all bein the form of new common stock, Kn.) (Do not round intermediatecalculations. Input your answer as a percent rounded to 2 decimalplaces.) d. The 7.6 percent cost of debt referred to earlierapplies only to the first $21 million of debt. After that, the costof debt will be 9.2 percent. At what size capital structure willthere be a change in the cost of debt? (Enter your answer inmillions of dollars (e.g., $10 million should be entered as "10").)e. What will the marginal cost of capital be immediately after thatpoint? (Consider the facts in both parts c and d.)