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Homework answers / question archive / Mayweather Corp
Mayweather Corp. has a debt-equity ration of 0.75. the firm is considering a new plant that will cost $48 million to build. When the company issues new equity, it incurs a floatation cost of 8%. The floatation cost on new debt is 3.5%.
What will be the initial cost of the plant if all equity is raised internally?
a) $53,650,000
b) $51,101,884
c) $73,600,997
d) $48,730,964
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