A company needs to raise $10 million in order to invest in a new project....
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Finance
A company needs to raise $10 million in order to invest in a new project. The necessary proceeds will be obtained by issuing $7.5 million in common stock and $2.5 million in bonds. The flotation costs for stocks and bonds are 9% and 3%, respectively. If the firms target debt-to-equity ratio is 0.5, then what is the true cost of the project after accounting for flotation costs?
Answer Choices:
$10,810,810.81
$10,752,688.17
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