Southern alliance company needs to raise 23 million to


Southern Alliance Company needs to raise $23 million to start a new project. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 50 percent common stock, 8 percent preferred stock, and 42 percent debt. Flotation costs for issuing new common stock are 14 percent, for new preferred stock, 5 percent, and for new debt, 4 percent. What is the true initial cost figure Southern should use when evaluating its project? (Do not round your intermediate calculations.)

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