A company invests $1,000,000 in a project that yields a 10% annual return. The company can borrow funds at a 6% annual interest rate. To maximize the rate of return on its own invested capital (equity), which financing structure should the company choose?
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A company invests $1,000,000 in a project that yields a 10% annual return. The company can borrow funds at a 6% annual interest rate. To maximize the rate of return on its own invested capital (equity), which financing structure should the company choose?
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