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Mayweather Corp

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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