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Calculate the wacc break point

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Western Transportation's capital structure consists of 30% debt and 70% common stock. According to its investment bank, Western can issue up to $ 240,000 of new debt at a cost of 3.8%; for any amount of new debt that you exceed that figure, the cost is 5.5%. Western expects to generate $ 560,000 in retained earnings this year. Calculate the WACC break point (s) associated with raising new funds.

Reference no: EM132546390

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