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PLEASE ANSWER USING EXCEL EQUATIONS Shinedown Company needs to raise $95 million to start a new project and will raise the money by selling new
PLEASE ANSWER USING EXCEL EQUATIONS
Shinedown Company needs to raise $95 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, 5 percent preferred stock, and 30 percent debt. Flotation costs for issuing new common stock are 7 percent, for new preferred stock, 4 percent, and for new debt, 2 percent. What is the 2 true initial cost figure the company should use when evaluating its project? Input Area: \begin{tabular}{|lc|} \hline Cost & $95,000,000 \\ Capital structure: & \\ Common stock & 65% \\ Preferred stock & 5% \\ Debt & 30% \\ Flotation cost: & \\ Common stock & 7% \\ Preferred stock & 4% \\ Debt & 2% \\ \hline \end{tabular} (Use cells A6 to B14 from the given information to complete this question.) Output Area: Floatation costs CostStep by Step Solution
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