Cully Company needs to raise $24 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 55 percent common stock, 10 percent preferred stock, and 35 percent debt. Flotation costs for issuing new common stock are 10 percent, for new preferred stock, 7 percent, and for new debt, 3 percent. What is the true initial cost figure Southern should use when evaluating its project?

Multiple Choice

$22,400,000

$26,911,051

$24,840,971

$25,740,000

$25,876,011