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Gravy Company expects earnings of P30million next year. Its dividend payout ratio is40%, and its...

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Finance

Gravy Company expects earnings of P30million next year. Its dividend payout ratio is40%, and its debt/equity ratio is1.50. Gravy uses nopreferred stock. At what amount of financing will there be a break point in Gravy's marginal costof capital?
A. P45million.
B. P30million.
C. P20million.
D. P18million.
Please help me

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