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2. Assume a company has a debt-to-equity ratio of 1.58 (D/E-1.58) and needs $14.125 million to fund a new project. The flotation cost on new
2. Assume a company has a debt-to-equity ratio of 1.58 (D/E-1.58) and needs $14.125 million to fund a new project. The flotation cost on new debt is 4.6 percent and 7 percent for new equity. How much is the expected dollar amount to be paid in flotation costs if it is firm policy to use 30% internal equity to fund all projects? (15 points)
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