You Are Considering a Project Which Requires $136,000 in External

question 206

Multiple Choice

You are considering a project which requires $136,000 in external financing. The flotation cost of
equity is 11 percent and the cost of debt is 4.5 percent. You wish to maintain a debt-equity ratio of45. What is the initial cost of the project including the flotation costs?

• A) $138,009
• B) $143,367
• C) $149,422
• D) $154,004
• E) $155,283

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