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The capital structure of the firm ABC is as follows: Debt 30% @ 8%, Preferred 20% @ 6%, and common stock 50% @ 12%. ABC
The capital structure of the firm ABC is as follows: Debt 30% @ 8%, Preferred 20% @ 6%, and common stock 50% @ 12%. ABC has $200,000 in reinvested profit and can borrow up to $300,000 debt without additional charges. At what break point(s) ABC need additional financing at higher cost for their capital structure?
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