Mesa Media is evaluating a project to help increase sales. The project costs $ 5 2 0
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Question:
Mesa Media is evaluating a project to help increase sales. The project costs $ and has an IRR equal to percent. The project is divisible, which means any portion can be purchased. Mesa can raise up to $ in new debt at a beforetax cost rd equal to percent; additional debt will cost percent before taxes. Mesa expects to retain $ of its earnings this year to support the purchase of the project. Mesa's cost of retained earnings is percent, and its cost of new common equity is percent. Its target capital structure consists of percent debt and percent common equity. If Mesa's marginal tax rate is percent, how much of the project should be purchased? Round your answer to the nearest dollar.
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