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ABC Corporation has a target capital structure consisting of 30% debt and 70% common equity. Assume the firm has insufficient retained earnings to fund the

ABC Corporation has a target capital structure consisting of 30% debt and 70% common equity. Assume the firm has insufficient retained earnings to fund the equity portion of its capital budget. It has 20-year, 13% semiannual coupon bonds that sell at their par value of $1,000. ABC

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