Suppose your company needs $14 million to build a new assembly line. Your target capital structure is 46 percent debt and 54 percent equity. The flotation cost for new equity is 9.5 percent, but the floatation cost for debt is only 2.5 percent. What is the true cost of building the new assembly line after taking flotation costs into account?

a.

b.

.

d.

ei

14.16 million

14.76 million

14.85 million

14.94 million

14.89 million

ANSWER: D 14.94 explain how i can get that snwer