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The Weinstein Corporation has a target capital structure that is 80 percent equity, 20 percent debt. The flotation costs for equity issues are 20 percent
The Weinstein Corporation has a target capital structure that is 80 percent equity, 20 percent
debt. The flotation costs for equity issues are 20 percent of the amount raised; the flotation costs
for debt issues are 6 percent. If Weinstein needs $48 million for a new manufacturing facility,
what is the true cost once flotation costs are considered?
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