A firm plans to issue $20m of stock. It can issue $8m of debt before it needs to issue debt at a higher rate. The firm h
Posted: Wed Jul 06, 2022 6:40 pm
A firm plans to issue $20m of stock. It can issue $8m of debtbefore it needs to issue debt at a higher rate.
The firm has no preferred stock and $10m of retained earningswhich it can use for financing.
If the firm's weights are 50% stock and 50% debt, whichbreakpoint will come first?
Group of answer choices
can't tell from the information given
both occur at the same time
equity
debt
The firm has no preferred stock and $10m of retained earningswhich it can use for financing.
If the firm's weights are 50% stock and 50% debt, whichbreakpoint will come first?
Group of answer choices
can't tell from the information given
both occur at the same time
equity
debt