Cully Company needs to raise $28 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 65 percent common stock, 10 percent preferred stock, and 25 percent debt. Flotation costs for issuing new common stock are 13 percent, for new preferred stock, 7 percent, and for new debt, 5 percent. What is the true initial cost figure Southern should use when evaluating its project?

• $30,912,000

• $30,000,000

• $25,666,667

• $32,500,000

• $31,250,000