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QUESTION
Help! so is this suggesting "external equity" is debt? and can you help calculate it?
Help! so is this suggesting "external equity" is debt? and can you help calculate it?
Fo = S/V * fS + B/V * fB this is the formula the book is using.. thank you
a company has a debt-equity ratio of .75. The company is considering a new plant that will cost $125 million to build. When the company issues new equity, it incurs a flotation cost of 10%. The flotation cost on new debt is 4%. What is the initial cost of the plant if the company raises all equity externally?
