Question
A firm is planning to invest $750,000 in new projects and plans to borrow 40% in bonds and issue shares for the remaining 60%. Flotation
A firm is planning to invest $750,000 in new projects and plans to borrow 40% in bonds and issue shares for the remaining 60%. Flotation costs are expected to 6% for issuing shares for 2% for bonds. How much additional capital should they borrow to invest $750,000? Use the average flotation cost to determine the amount
$39,473.68
$34,518,.88
$65,217.39
$55,212.90
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
