What is the last dollar raised to complete the expansion

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Reference no: EM131967406

Klose outfitters inc believes that its optimal capital structure consists of 60% common equity and 40% debt and tax rate is 40%. Klose must raise additional capital for expansion. the firm will have 2 million of retained earnings with a cost of rs = 12%.

New common of 6 million would have a cost of 15% Klose can raise up to 3 million at interest rate of rd =10% and 4 million of debt at rd=12%. the CFO expansion will be 5.9 million. what is the last dollar raised to complete the expansion?

Reference no: EM131967406

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