Question: 3. (10 points) An engineer is working on a design project for a plastics manufacturing company that has a cost of equity capital of 6%

3. (10 points) An engineer is working on a design project for a plastics manufacturing company that has a cost of equity capital of 6% per year for retained earnings that may be used to 70% equity finance the project with the balance borrowed externally at 8.5% An alternative financing strategy requires only 75% equity funds with the balance borrowed at a lower rate of 8% per year. Which funding source has the lower cost of capital

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