1. Dora Inc. is raising $2,000,000 in capital for its next project. The firm maintains D/E ratio of 0.7 and it wishes to stay at that number after the capital raising occurs. An investment bank hired to raise capital charges 4% for each amount of debt and 8% for each amount of equity raised. How much debt must Dora Inc. raise to maintain its D/E ratio and raise $2,000,000 after the investment banking fees (a.k.a. floatation costs)?
2. A.$600,000
3. B.$879,397
4. C.$640,703
5. D.$879,397
6. E. Cannot be determined from the information available