单选题 Stolzenbach Technologies has a target capital structure of 60 percent equity and 40 percent debt. The schedule of financing costs for the Stolzenbach is shown in the table below:
{{U}}Amount of New Debt (in millions){{/U}}
{{U}}After-tax Cost of Debt{{/U}}
{{U}}Amount of New Equity (in millions){{/U}}
{{U}}Cost of Equity{{/U}}
$0 to $199
4.5 percent
$0 to $299
7.5 percent
$200 to $399
5.0 percent
$300 to $699
8.5 percent
$400 to $599
5.5 percent
$700 to $999
9.5 percent
Stolzenbach Technologies has breakpoints for raising additional financing at both:
  • A. $500 million and $1000 million.
  • B. $400 million and $700 million.
  • C. $500 million and $700 million.
【正确答案】 A
【答案解析】Stolzenbach will have a break point each time a component cost of capital changes, for a total of three marginal cost of capital schedule breakpoints.