URGENT

A firm is planning to invest $1,000,000 in new projects and plans to borrow 40% in bonds and issue shares

for the remaining 60%. Flotation costs are expected to 10% for issuing shares for 5% for bonds. How

much additional capital should they borrow to raise the capital of $1,000,000? Use the average flotation cost to

determine the amount (as shown in the book).

		$34,518.83
		$41,666.67
		$66,993.46
		$86,956.52