Suppose your company needs $10 million to build a new assembly line. Your target debt−equity ratio is .4. The flotation cost for new equity is 10 percent, but the flotation cost for debt is only 7 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.
What is your company’s weighted average flotation cost, assuming all equity is raised externally?
Answers: 2
Business, 22.06.2019 18:50
)a business incurs the following costs per unit: labor $125/unit, materials $45/unit, and rent $250,000/month. if the firm produces 1,000,000 units a month, calculate the following: a. total variable costs b. total fixed costs c. total costs
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Business, 22.06.2019 20:00
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Suppose your company needs $10 million to build a new assembly line. Your target debt−equity ratio i...
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