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JPR Company is financed 75 percent by equity and 25 percent by debt. If the firm expects to earn $30 million in net income next

JPR Company is financed 75 percent by equity and 25 percent by debt. If the firm expects to earn $30 million in net income next year and retain 40% of it, how large can the capital budget be before common stock must be sold?

Select one:

a. $12.0 million

b. $7.5 million

c. $15.5 million d. $16.0 million

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