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1.a) Suppose you have a project to invest. If retained earnings cost is less than cost of external equity, and you have enough retained earnings,
1.a) Suppose you have a project to invest. If retained earnings cost is less than cost of external equity, and you have enough retained earnings, how would you finance your new project. b)Assume pre- tax cost of debt is10%,and tax rate is 40%, cost of preferred stock is 12% and cost of retained earnings is 9%, if you invest from debt 40 mn, preferred stock 20 mn and retained earnings 140 mn, what is the WACC.
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