Problem
Light speed requires $180,000 to fund a new project next year. The firm expects to earn excess cash of$68,000 this year, after all the expenses, taxes and dividends are paid. the firm can borrow up to$150,000 at 6.5 percent interest for up to 10 years or it can issue up to25,000 new shares of stock that will have an estimated value of $35 per share at the end of this year. According to the pecking order theory, How much will the firm raise in new equity capital to fund this project.