Southern Alliance Company needs to raise $26 million to start a new project and will...
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Southern Alliance Company needs to raise $26 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 50 percent common stock, 12 percent preferred stock, and 38 percent debt. Flotation costs for issuing new common stock are 9 percent, for new preferred stock, 9 percent, and for new debt, 3 percent. What is the true initial cost figure Southern should use when evaluating its project? (Do not round your intermediate calculations.) O $27,747,200 $28,987,993 O $24,180,000 O $27,873,070 O $26,758,147
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