Cully Company needs to raise $21 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 70 percent common stock, 11 percent preferred stock, and 19 percent debt. Flotation costs for issuing new common stock are 11 percent, for new preferred stock, 8 percent, and for new debt, 5 percent. What is the true initial cost figure Southern should use when evaluating its project?

Multiple Choice

$23,212,115

$22,283,630

$19,320,000

$23,001,300

$24,140,600