Vishnu the CFO of Interbug Biotech has been analyzing the company's capital structure. It is 49%...
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Vishnu the CFO of Interbug Biotech has been analyzing the company's capital structure. It is 49% equity using retained earnings. Currently the company uses retained earning for common equity with a cost of 10%. When the amount of retained earnings exceeds $4 million the company will need to issue new common equity. At what level of capital will the retained earning be used up and require the company to issue new equity? Vishnu the CFO of Interbug Biotech has been analyzing the company's capital structure. It is 49% equity using retained earnings. Currently the company uses retained earning for common equity with a cost of 10%. When the amount of retained earnings exceeds $4 million the company will need to issue new common equity. At what level of capital will the retained earning be used up and require the company to issue new equity?
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Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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