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A firm plans to issue $20m of stock. It can issue $10m of debt before it needs to issue debt at a higher rate. The

A firm plans to issue $20m of stock. It can issue $10m of debt before it needs to issue debt at a higher rate. The firm has no preferred stock and $7m of retained earnings which it can use for financing. If the firm's weights are 50% stock and 50% debt, which breakpoint will come first?

Group of answer choices

debt

equity

both occur at the same time

can't tell from the information given

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