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Suppose your company needs $14 million to build a...

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Suppose your company needs $14 million to build a new assembly line. Your target debt?equity ratio is 0.94. The flotation cost for new equity is 12 percent, but the flotation cost for debt is only 6 percent. Requirement 1: What is your company?s weighted average flotation cost, assuming all equity is raised externally? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) Weighted average flotation cost % Requirement 2: What is the true cost of building the new assembly line after taking flotation costs into account? (Do not include the dollar sign ($). Round your answer to the nearest whole dollar amount. (e.g.,1,234,567)) True cost $

 

Paper#8832 | Written in 18-Jul-2015

Price : $25
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