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Suppose your company needs $18 million to build a new assembly line. Your target debt-equity ratio is 0. The flotation cost for new equity is 10...
Suppose your company needs $18 million to build a new assembly line. Your target debt-equity ratio is 0.84. The flotation cost for new equity is 10 percent, but the flotation cost for debt is only 5.5 percent.
What is your company's weighted average flotation cost, assuming all equity is raised externally? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
What is the true cost of building the new assembly line after taking flotation costs into account? (Do not include the dollar sign ($). Round your answer to the nearest whole dollar amount. (e.g.,1,234,567))
