Question: Maleficent Industries has determined that its optimal capital structure is 20% debt, 30% preferred equity, and 50% common equity. It wants to raise $50 million

Maleficent Industries has determined that its optimal capital structure is 20% debt, 30% preferred equity, and 50% common equity. It wants to raise $50 million to fund a new project. Currently, it has $20 million in net income and the dividend payout ratio is 50%. How much is REBP? Should maleficent use retained earnings or should it issue new common equity?

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