Question
Your company is considering a project that will cost $1 million. The project will generate after-tax operating cash flows of $250,000 per year for 7
Your company is considering a project that will cost $1 million. The project will generate after-tax operating cash flows of $250,000 per year for 7 years. The WACC is 15%, and the firm's target D/E ratio is .6 The flotation cost for equity is 5%, and the flotation cost for debt is 3%. (step by step )
a ) (Assume no salvage and NWC) What is the weighted average flotation cost?
b)What is the NPV for the project without considering flotation costs?
c)What is the NPV after adjusting for flotation costs?
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Project NPV with Flotation Costs Heres the stepbystep solution to your questions a Weighted Average Flotation Cost Calculate the cost of equity after ...
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
