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What is the breakpoint

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Reference no: EM133115788

Assume a company has a capital structure of 50%, 40% and 10% respectively for equity, debt and preferred stock. The company is planning to expand its operations from next year and expects to raise sh. 800M in net income this year with a dividend payout of 10%;

Required:

i) What is the breakpoint?

ii) How much will be raised from equity, preferred stock and debt respectively at break point?

Reference no: EM133115788

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