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CCBI is now running the book for Corporation B's imminent 5-year bond issuance. According to the DCM representative's responses, the limit order queues from their
CCBI is now running the book for Corporation B's imminent 5-year bond issuance. According to the DCM representative's responses, the limit order queues from their institutional investors are as follows: Corporation B is expected to end up at a profit of HKD520M by the end of this year and its CFO maintains a target debt to equity ratio of 0.8 A. If Corporate B would like to end up at minimize WACC and at the same time maximize the new capital raised under the minimum WACC, how much of the HKD 520M profit would be retained and what would be the total amount of capital raised? (10%) B. If Corporate B would like to retain all profit, how much would be the debt issued if Corporate B would like to maintain its capital structure? (10%)
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