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A firm needs to purchase equipment for its 2 , 0 0 0 drive - ins nationwide. The total cost of the equipment ( not
A firm needs to purchase equipment for its driveins nationwide. The total cost of the equipment not including flotation costs is $ million. It is estimated that the aftertax cash inflows from the project will be $ annually in perpetuity. The firm's optimal capital structure consists of debt and equity. The firm's cost of equity is its pretax cost of debt is and the flotation costs of debt and equity are and respectively. What is the dollar flotation cost for the proposed financing? Round your final answer to the nearest dollar.
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