Chittenden is considering the acquisition of another firm in its industry. The acquisition is expected to increase Chittenden's free cash flow by $5 million the first year and this contribution is expected to grow at a rate of 4% per year from then on. Chittenden has negotiated a purchase price of $110 million. Chittenden has an equity cost of capital of 12.3%, a debt cost of capital of 8.5%, a tax rate of 40%, and continually adjusts its capital structure to maintain its current debt-to-equity ratio of 2.

How much of the acquisition cost must be financed with equity?

answer

The remaining cost = $110,000,000 - $95,238,095.24=$14,761,904.76 will be financed by new equity issuance.

why this answer not like $142,857,142.90 - $95,238,095.2 ?