Determine the break point for equity

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ABC Corporation has a long-term debt weight of 35% and the equity weight of 65% in the capital structure. The business has sh.400,000 of retained earnings left at a cost of 12%. Thereafter, they can issue new common stock at a cost of 17%. ABC can use long-term debt as a source of financing up to the amount of sh.200,000 at 8% and thereafter at 10%.

REQUIRED: Determine the break point for equity?

Reference no: EM133116432

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