Needing help with question 30b. I'm overthinking it and second quessing.

a. Cost of uur, b. Cost of preferred stock, K C. Cost of common equity in the form of retained earnings, K d. Weighted average cost of capital 30. Eaton International Corporation has the following capital structure: (after tax) Weightings 10 Weighted Cost Cost 7.1% 25% 1.78% .86 8.6 Debt.......... Preferred stock (K). ...... 9.17 Common equity (K) 14.1 (retained earnings) ...... 11.81% Total: Weighted average cost of capital (K).... a. If the firm has $19.5 million in retained earnings, at what size capital structure will the firm run out of retained earnings? b. The 7.1 percent cost of debt referred to above applied only to the first $14 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? 31. The Nolan Corporation finds that it is necessary to determine its marginal cost of capital. Nolan's current capital structure calls for 45 percent debt, 15 percent preferred stock, and 40 percent common equity. Initially common equity will the form of retained earnings (K) and then new common stock (K). The cost the various sources of financing are as follows: debt, 5.6 percent; preferred su 9.0 percent; retained earnings, 12.0 percent; and new common stock, 13.2 per