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Western Transportation's capital structure consists of 35 percent debt and 65 percent common equity. According to its investment banker, Western can issue up to $260,000
Western Transportation's capital structure consists of 35 percent debt and 65 percent common equity. According to its investment banker, Western can issue up to $260,000 in new debt at a 4.1 percent cost for any amount of new debt greater than $260,000 the cost is 5.7 percent. Western expects to generate $590,000 in retained earnings this year. Compute the WACC break point(s) associated with raising new funds
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