How much new borrowing will be required

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Reference no: EM131603649

The Four Stars has aftertax income of $62,000 for the year just ended. The company has a residual dividend policy and a target debt-equity ratio of .5. The firm wants to invest $89,000 in a new project. How much new borrowing will be required?

a. $44,500

b. $2,667

c. $17,500

d. $29,667

e. $59,333

Reference no: EM131603649

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