If your firm follows the practice of incorporating


Your company is considering a project that will cost $175. The project will generate after-tax cash flows of $37.50 per year for five years. The WACC is 10% and the firm's D/A ratio is .62. The flotation cost for equity is 5%, the flotation cost for debt is 3%, and your firm does not plan on issuing any preferred stock within its capital structure. If your firm follows the practice of incorporating flotation costs into the project's initial investment, what is the firm's flotation-adjusted cash flow in year 0?

-$90.26
-$88.14
-$196.25
-$181.84

 

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: If your firm follows the practice of incorporating
Reference No:- TGS0602133

Expected delivery within 24 Hours