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HELP RIGHT NOW ASAP PLEASE Macon Corporation has a target capital structure consisting of 40% Debt and 60% Common Equity. Macon can borrow up to
HELP RIGHT NOW ASAP PLEASE
Macon Corporation has a target capital structure consisting of 40% Debt and 60% Common Equity. Macon can borrow up to $400,000 from it's banker at an after-tax rate of 6.75%. Additional debt can be raised by issuing 10 -year semi-annual bonds that will carry an after-tax cost of 8.00%. The firm has $475,000 available in retained earnings. The cost of retained earnings is 14.00%. If new common shares are issued, the cost will be 16.2% Calculate the first break point in the Macon Corporation capital funding. Your Step by Step Solution
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