申論題

2. Cartwell Products has compiled the data shown in the following table for the current costs of its
three basic sources of capital - long-term debt, preferred stock, and common stock equity - for various
ranges of new financing.

The company’s capital structure weights used in calculating its weighted average cost of capital are
shown in the following table.

d. Using the results of part c, along with the following information on the available investment opportunities draw the firm’s weighted marginal cost of capital (MC(C)schedule and investment
opportunity schedule (IOS) on the same set of axes.