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Please show step-by-step calculations in excel. Thank you! P13.2. Suppose your company needs $43 million to build a new assembly line. Your target debt-equity ratio
Please show step-by-step calculations in excel. Thank you!
P13.2. Suppose your company needs $43 million to build a new assembly line. Your target debt-equity ratio is .65. The flotation cost for new equity is 6 percent and the flotation cost for debt is 2 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. What is the true cost of building the new assembly line after taking flotation costs into account? New Assembly Line Debt-equity ratio Flotation cost for new equity Flotation cost for debt 43,000,000 0.65 0.06 0.02Step by Step Solution
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