Will has been working overtime and weekends for almost two years. He wants to save up enough money so he can open his own electrical repair shop. Today, something happened
that could be a big break for him. His employer offered to finance 60% of Will's venture for
51% ownership. Will is reluctant. It would mean that he could get his venture underway almost
immediately. But it would also mean that he would be giving up control of the business.

Miami incorporated estimates that its retained earnings break point (bpre) is $21 million, and its wacc is 13.40 percent if common equity comes from retained earnings. however, if the company issues new stock to raise new common equity, it estimates that its wacc will rise to 13.88 percent. the company is considering the following investment projects: project size irr a $4 million 14.00% b 5 million 15.10 c 4 million 16.20 d 6 million 14.20 e 1 million 13.42 f 6 million 13.75 what is the firm's optimal capital budget?