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15. A company has determined that its optimal capital structure consists of 40 percent debt and 60 percent equity. Assume the firm is considering an

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15. A company has determined that its optimal capital structure consists of 40 percent debt and 60 percent equity. Assume the firm is considering an investment worth $22,500 and other internally generated income other than net income of $25,000. The expected cashflows of the project is $3,500 with growth pecked at the expected inflation rate of 0%. kd for existing debt =8% and new debt issues is 9.5%. Current Net income =$40,000. Payout ratio =50%. Tax rate =40%. P0=$25. Growth (g)=0%. Shares outstanding =10,000. Flotation cost on additional equity =15% B. Set up a marginal cost of capital schedule for the firm.(3pts)

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