Calculating Flotation Costs [LO4] Suppose your company needs $20 million to build a new assembly line. Your target debtequity ratio is .

18. Calculating Flotation Costs [LO4] Suppose your company needs $20 million to build a new assembly line. Your target debt−equity ratio is .75. The flotation cost for new equity is 8 percent, but the flotation cost for debt is only 5 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.a.