A fiRm Needs to Raise $165 Million for a Project

question 101

Multiple Choice

A firm needs to raise $165 million for a project. If external financing is used, the firm faces flotation costs of 8% for equity and 2.5% for debt. If the project is to be financed 60% with equity and 40%
With debt, how much cash must the firm raise in order to finance the project?

• A) $128.6 million
• B) $142.2 million
• C) $161.7 million
• D) $171.6 million
• E) $175.2 million

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Definitions:

REBT

Rational Emotive Behavior Therapy, a cognitive-behavioral approach focusing on challenging and changing irrational beliefs.

Meta-Analysis

An analytical method that synthesizes research findings from various independent studies to establish overall trends and outcomes.

Disruptive Behavior

Refers to actions or behaviors that interrupt the normal flow or operations of environments such as classrooms, workplaces, or social settings.

Cognitive Therapy

A form of psychotherapy that emphasizes the importance of thought patterns and beliefs in influencing emotions and behaviors.