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Loyola Corporation has a target capital structure of 25% bond financing, 20% preferred stock financing, and 55% common equity financing. Loyola forecasts it will retain
Loyola Corporation has a target capital structure of 25% bond financing, 20% preferred stock financing, and 55% common equity financing. Loyola forecasts it will retain $1,000,000 of new earnings in the coming year. Where is the break in Loyola's cost of capital schedule?
a. | $ 5,000,000 | |
b. | $ 1,818182 | |
c. | $ 4,000,000 | |
d. | $ 1,000,000 |
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