A company currently has cost of equity of 13.0% and cost of debt of 5.0%. Its WACC is 6.2%. What would you recommend to finance their corporate growth over the next few years? Oa. Issue new shares of stock since they are so leveraged O b. Borrow from an insurance company Oc. Issue new bonds since the cost of debt is relatively low. Od. Fund with bank loans and preferred stock O e. Issue convertible bonds

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A company currently has cost of equity of 13.0% and cost of debt of 5.0%. Its WACC is 6.2%. What would you recommend to finance their corporate growth over the next few years?

Oa. Issue new shares of stock since they are so leveraged

O b. Borrow from an insurance company

Oc. Issue new bonds since the cost of debt is relatively low.

Od. Fund with bank loans and preferred stock

O e. Issue convertible bonds

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