Suppose your company needs $$18$ million to build a new assembly line. Your target debt$-$equity ratio is $\mathrm{.}7.$ The flotation cost for new equity is $7$ percent, but the flotation cost for debt is only $4$ 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.

a$.$

What is your company$$s weighted average flotation cost, assuming all equity is raised externally?What is the true cost of building the new assembly line after taking flotation costs into account?