The cost of debt for firm XYZ is 6%. It's tax rate is 40%. The cost of retained earnings is 12% and the cost of external common equity is 14%. Retained earnings is $5000. The target capital structure calls for 45% debt and 55% equity. Compute the following: A. Retained earnings break point
B. WACC below the RE break point
C. WACC above the RE break point

Christopher kim, cfa, is a banker with batts brothers, an investment banking firm. kim follows the energy industry and has frequent contact with industry executives. kim is contacted by the ceo of a large oil and gas corporation who wants batts brothers to underwrite a secondary offering of the company's stock. the ceo offers kim the opportunity to fly on his private jet to his ranch in texas for an exotic game hunting expedition if kim's firm can complete the underwriting within 90 days. according to cfa institute standards of conduct, kim: a) may accept the offer as long as he discloses the offer to batts brothers.b) may not accept the offer because it is considered lavish entertainment.c) must obtain written consent from batts brothers before accepting the offer.