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Being Human, Inc., recently issued new securities to finance a new TV show. The project cost...

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Finance

Being Human, Inc., recently issued new securities to finance anew TV show. The project cost $35 million, and the company paid$2.2 million in flotation costs. In addition, the equity issued hada flotation cost of 7 percent of the amount raised, whereas thedebt issued had a flotation cost of 3 percent of the amount raised.If the company issued new securities in the same proportion as itstarget capital structure, what is the company’s target debt-equityratio?

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