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. What is the weighted average floatation cost for this firm?
2. A.5.20%
3. B.6.00%
4. C.6.35%
5. D.8.00%
6. E. Cannot be determined from the information available