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Vishnu the CFO of Interbug Biotech has been analyzing the company's capital structure. It is 49% equity using retained earnings. Currently the company uses
Vishnu the CFO of Interbug Biotech has been analyzing the company's capital structure. It is 49% equity using retained earnings. Currently the company uses retained earning for common equity with a cost of 10%. When the amount of retained earnings exceeds $4 million the company will need to issue new common equity. At what level of capital will the retained earning be used up and require the company to issue new equity?
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