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Southwest Tours needs $134,000 for a new project. The firm has a target capital structure of 25 percent debt and 75 percent equity. The flotation
Southwest Tours needs $134,000 for a new project. The firm has a target capital structure of 25 percent debt and 75 percent equity. The flotation cost of debt is 5.4 percent compared to 8.6 percent for equity. What amount does the firm need to raise if it generates sufficient internal equity to cover the equity need?
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