Question
Trower Corp. has a debt-equity ratio of 0.85. The company is considering a new plant that will cost $111 million to build. When the company
Trower Corp. has a debt-equity ratio of 0.85. The company is considering a new plant that will cost $111 million to build. When the company issues new equity, it incurs a flotation cost of 8.1 percent. The flotation cost on new debt is 3.6 percent.
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