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Homework answers / question archive / Caughlin Company needs to raise $55 million to start a new project
Caughlin Company needs to raise $55 million to start a new project. They have a target capital structure of 70% common stock, 5% preferred stock, and 25% debt. Flotation costs for issuing new common stock are 9%, 6% for preferred stock, and 3% for debt. What is the true initial cost figure the company should use when evaluating this project?
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