Monica is the CFO of Cooking for Friends (CFF) and uses the pecking order hypothesis...
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Finance
Monica is the CFO of Cooking for Friends (CFF) and uses the pecking order hypothesis philosophy when she raises capital for company projects. Currently, she can borrow up to $400,000 from her bank at a rate of 7.5%, float a bond for $800,000 at a rate of 9.5%, or issue additional stock for $1,500,000 at a cost of 17%. What is the WACC for CFF if Monica chooses to invest
a.$1,000,000 in new projects?
b.$2,200,000 in new projects?
c.$2,700,000 in new projects?
What is the WACC for CFF if Monica chooses to invest $1 ,000,000 in new projects?
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