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v) Due to the unexpected high volatility and uncertainty in the financial market, the cost of debt is no longer constant. The initially estimated after-tax
v) Due to the unexpected high volatility and uncertainty in the financial market, the cost of debt is no longer constant. The initially estimated after-tax cost of debt is only applicable for a total debt of RM300,000. Beyond this amount of debt, the after-tax cost of debt will be higher at 5%. Calculate the breakpoint of debt, and explain what it means.
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