Module 8 Assignment The Nealon Manufacturing Company, Inc., is in the midst of negotiations to noqulre a plant in Fargo, North Dakota. The company CFO, Jarnes Mealon, is the son of the founder and CEO of the company and the heir apparent to the CEO position, so he is very concerned about making such a large commitment of money to the new plant. The cost of the purchase in $10 million, which is roughly one half the size of the company today, To begin his analysis, Jumes has launched the firm's very first cont-of-capital estimation. The company's current balance sheet, rentated to reflect market values, has been converted to percentages as follows: Nealon Manufacturing Company Inc., Type of BOJE Premature firmwing 350 CM The company paid dividends to its common stockholdern of $1.75 per share last year, and the projected rate of annual growth in dividends in 7 percent per year for the indefinito futuro. Nenlon's common stock trades over the counter and has a current market price of $35 per share. In addition, the firm's bonda have an AA rating Moreover, A bonde are currently yielding 7 percent. The preferred stock has a current market price of $19 per shore. all the firm is in a 34 percent tax bracket, what is its weighted average cost of capital? b. In the analysis done so for, we have not considered the effects of flotation costs. Assume now that Neaton is raining a total of $40 million using the above financing mix New debt financing wit require that the fim pay 60 basis points one-halt a percent) in issue couts, the preferred stock Insue will require flotation costs of 200 basis points, and the common stock issue will require flotation costs of 100 basis points What are the total flotation costs the firm will incur to raise the needed $40 million? L. How should the flotation conts be incorporated into the analysis of the $40 million investment the templans to make