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Marble Construction estimates that its WACC is 9% if equity comes from retained earnings. However, if the company issues new stock to raise new equity,
Marble Construction estimates that its WACC is 9% 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 9.9%. The company believes that it will exhaust its retained earnings at $2,300,000 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: Project Size IRR A $ 660,000 13.7% B 1,000,000 13.2 1,030,000 9.6 D 1,160,000 9.4 E 480,000 9.7 F 660,000 10.6 G 680,000 10.5 Assume that each of these projects is independent and that each is just as risky as the firm's existing assets. Which set of projects should be accepted? -Select- -Select- -Select- Project A Project B Project C Project D Project E Project F Project G -Select- -Select- -Select- -Select- What is the firm's optimal capital budget? Round your answer to the nearest dollar. $
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