Boxer & Company are planning to enter export market. The Company needs to spend around $300 million to balance and upgrade manufacturing facilities to cater for new markets. The firms present optimal capital structure is as under. Long-term debt $180,000,000 Common equity 170,000,000 Total liabilities and equity $ 350,000,000 New bonds will have a 12 percent coupon rate and will be sold at par. Common stock, currently selling at $80 a share, can be sold to net the company $76 a share. Stockholders required rate of return is estimated to be 15 percent comprising of 9% dividend yield and 6% growth. Retained earnings are estimated to be $ 100 million. The marginal tax rate is 35%.