The Nolan Corporation finds that it is necessary to determineits marginal cost of capital. Nolan’s current capital structurecalls for 45 percent debt, 25 percent preferred stock, and 30percent common equity. Initially common equity will be in the formof retained earnings (Ke) and then new common stock (Kn). The costsof the various sources of financing are as follows: debt, 7.5percent; preferred stock, 5 percent; retained earnings, 13 percent;and new common stock, 14.2 percent. a. What is the initial weightedaverage cost of capital? (Include debt, preferred stock, and commonequity in the form of retained earnings, Ke.) (Do not roundintermediate calculations. Round the final answer to 2 decimalplaces.) Weighted average cost of capital % b. If the firm has $15million in retained earnings, at what size of investment will thefirm run out of retained earnings? (Enter the answer in millions.)Capital structure size (X) $ million c. What will the marginal costof capital be immediately after that point? (Equity will remain at30 percent of the capital structure, but it will all be in the formof new common stock, Kn.) (Do not round intermediate calculations.Round the final answer to 2 decimal places.) Marginal cost ofcapital % d. The 7.5 percent cost of debt referred to above appliesonly to the first $36 million of debt. After that the cost of debtwill be 8.5 percent. At what size of investment will there be achange in the cost of debt? (Enter the answer in millions.) Capitalstructure size (Z) $ million e. What will the marginal cost ofcapital be immediately after that point? (Consider the facts inboth parts c and d.) (Do not round intermediate calculations. Roundthe final answer to 2 decimal places.) Marginal cost of capital%