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Question 20 (10 points) A firm with a corporate tax rate of 20% has the optimal capital structure and component costs of as follows: Categories
Question 20 (10 points) A firm with a corporate tax rate of 20% has the optimal capital structure and component costs of as follows: Categories of capital Proportion Types of capital k Condition Short-term debt 0.3 Short-term loans 6%* Up to THB2.4 million Short-term loans 7%* An unlimited amount Common equity 0.7 Retained earnings 10% An unlimited amount Common stock 13% An unlimited amount *before-tax The net income in this year is expected to be THB42 million. The firm plans to use part of this year's net income to support its operation next year. The firm's dividend payout ratio is 80%. MCC (%) MCC3 MCC2 MCC1 BP1 BP2 Amount of capital raised (THB million) (a) What are BP, and BP2 (in THB million)? (b) What are MCC1, MCC2, and MCC3
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