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QUESTION
Please assist with this question and show formula, and work. Flotation Costs: Medina Corp. has a debt-equity ratio of . The company is considering a...
Please assist with this question and show formula, and work.
Flotation Costs: Medina Corp. 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?
