Palacios Incorporated estimates that its retained earnings break point (BPRE) is $45 million, and its WACC is 14.8 perce

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Palacios Incorporated Estimates That Its Retained Earnings Break Point Bpre Is 45 Million And Its Wacc Is 14 8 Perce 1 (34.73 KiB) Viewed 10 times

Palacios Incorporated estimates that its retained earnings break point (BPRE) is $45 million, and its WACC is 14.8 percent if common equity comes from retained earnings. However, if the company issues new stock to raise new common equity, it estimates that its WACC will rise to 15.8 percent. The company is considering the following investment projects: Project A B a. $45 million UDE b. $43 million c. $46 million O d. $49 million e. $48 million C Size $18 million 6 million 5 million 15 million 10 million What is the firm's optimal capital budget? IRR 16.20% 15.10 15.50 15.70 15.90