Exhausts retained earnings and is forced to sell new shares

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Reference no: EM131065670

Precision Steel expects to retain $72,000 of it earnings for the current year which it will use to partially fund new investment opportunities. The optimal capital structure is comprised of 30% debt, 10% preference shares, and 60% ordinary share equity. Taxes are expected to be 30%. What dollar amount of total new financing can Precision raise before it exhausts its retained earnings and is forced to sell new shares?

Reference no: EM131065670

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