Question: Will and Ben Ice Cream plan to build a new mixing plant to serve customers in Mexico. Because the company is in good financial shape

Will and Ben Ice Cream plan to build a new mixing plant to serve customers in Mexico. Because the company is in good financial shape with equity funds returning 11% per year, the bank will charge an interest rate of 8% per year for the loan An MARR that is 5% over the WACC is required to proceed with the project, which sets the MARR at 14%.

What percentage of debt financing can the company assume to meet its MARR requirement?

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