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external equity financing

14-5 EXTERNAL EQUITY FINANCING Coastal Carolina Heating and Cooling Inc. has a 6-month backlog of orders for its patented sol

beginning of 2020 to expand capacity as desired? Assume that the firm uses only debt and common equity in its capital structu

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Answer #1
Amount to be retained and available for capital expenditure = 5000000*(1-55%) = $ 2,250,000
Total equity required = 20000000*65% = $     13,000,000
External equity required = 13000000-2250000 = $     10,750,000
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