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A firm needs $ 2 0 million for new investments. The firm s target debt to equity ratio is 1 : 3 , and the

A firm needs $20 million for new investments. The firms target debt to equity
ratio is 1:3, and the current net income is $8 million.
(a) How much debt should the firm take?
(b) Does the firm pay dividends? If yes, how much?
(c) Does the firm issue new equity? If yes, how much?

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