Question
Marble Construction estimates that its WACC is 8% if equity comes from retained earnings. However, if the company issues new stock to raise new equity,
Marble Construction estimates that its WACC is 8% if equity comes from retained earnings. However, if the company issues new stock to raise new equity, it estimates that its WACC will rise to 8.9%. The company believes that it will exhaust its retained earnings at $2,400,000 of capital due to the number of highly profitable projects available to the firm and its limited earnings. The company is considering the following seven investment projects:
The Select options are ACCEPT or DON'T ACCEPT
see attachment below:
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Fundamentals Of Financial Management
Authors: Richard Bulliet, Eugene F Brigham, Brigham/ Houston
11th Edition
1111795207, 9781111795207
