14-8

8 Cully Company needs to raise $30 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 55 percent common stock, 11 percent preferred stock, and 34 percent debt. Flotation costs for issuing new common stock are 11 percent, for new preferred stock, 9 percent, and for new debt, 2 percent. What is the true initial cost figure Southern should use when evaluating its project? 10 points Multiple Choice $32,509,753 $31,209,363 $27,800,000 $32,316,000 $33,810,143