The flotation cost of equity is 116 percent and the


You are evaluating a project which requires $230,000 in external financing. The flotation cost of equity is 11.6 percent and the flotation cost of debt is 5.4 percent. What is the initial cost of the project including the flotation costs if you maintain a debt-equity ratio of 0.45?

A) $248,494
B) $249,021
C) $254,638
D) $255,551
E) $255,646

 

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Finance Basics: The flotation cost of equity is 116 percent and the
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