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Problem 14-19 Calculating Flotation Costs (LO5,7) 2 points 8 04:45:45 ...

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Finance

Problem 14-19 Calculating
Flotation Costs (LO5,7)
2
points
8
04:45:45
Skipped
e Book
Craddock Company needs to raise $65 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 70% common stock, 5% preferred stock, and 25% debt. Flotation costs for issuing new common stock are 8%; for new preferred stock, 5%; and for new debt, 2%.
What is the true initial cost figure the company should use when evaluating its project? (Enter the answer in dollars. Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Initial cost
$

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