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Suppose that Good Friend Industries is considering an expansion of its facilities. This expansion requires that Good Friend obtain $1,000,000 of financing. Flotation costs for

Suppose that Good Friend Industries is considering an expansion of its facilities. This expansion requires that Good Friend obtain $1,000,000 of financing. Flotation costs for debt and equity are 4% and 8%, respectively. If flotation costs are considered, what is the true cost of the expansion (assuming that Good Friend's target debt-equity ratio is 0.5 and its corporate tax rate is 37%)

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