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giving the following two capital structures available to fund a project capital structure A source of fund ------ weight common shares -----25% Bonds-----------------20% retained earnings
giving the following two capital structures available to fund a project
capital structure A
source of fund ------ weight
common shares -----25%
Bonds-----------------20%
retained earnings ---45%
loan--------------------10%
capital structure B
source of fund-------weight
common shares -----25%
bonds------------------35%
retained earnings-----35%
loan------------------5%
if both capital structures have WACC of 12.5% ,which capital structure you recommend giving that the finance manager is risk seeker (taker) why ?
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