esook

Coastal Carolina Heating and Cooling Inc. has a $6-$month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by $35\%$ with a $$15$ million investment in plant and machinery. The firm wants to maintain a $35\%$ debt level in its capital structure. It also wants to maintain its past dividend policy of distributing $45\%$ of last year's net income. In $2021,$ net income was $$5$ million. How much external equity must Coastal Carolina seek at the beginning of $2022$ to expand capacity as desired? Assume that the firm uses only debt and common equity in its capital structure. Write out your answer completely. For example, $25$ million should be entered as $25,000,000.$ Round your answer to the nearest cent.

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