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The firm currently has $300,000 in uninvested bond capital and $500,000 in retained earnings. 1) Calculate the break point for new debt. 2) Calculate...

The firm currently has $300,000 in uninvested bond capital and $500,000 in retained earnings.
1) Calculate the break point for new debt.
2) Calculate the break point for new equity.
Note: There is no flotation cost associated with the preferred stock.
BreakPoint Cost of Capital
Bonds WACC2
Equity WACC3

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