Mixture of debt-preferred stock and retained equity

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Reference no: EM131595818

Max Corporation can raise up to $2200 million for investment from a mixture of debt, preferred stock and retained equity. Above $2200 million, the firm must issue new common stock. Assuming that debt costs and preferred stock costs remain unchanged, the marginal cost of capital for amounts up to $2200 million will be ____ the marginal cost of capital for amounts over $2200 million.

A. less than

B. equal to

C. greater than

D. cannot be determined from the information given

Reference no: EM131595818

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