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El Camino College Operations And Supply Chain Management Assignment Help - HELP PLEASE


Question - Suppose your company needs $14 million to build a new assembly line. Your target debt?equity ratio
is 0.50. The flotation cost for new equity is 10 percent, but the flotation cost for debt is only 7 percent.
Your boss has decided to fund the project by borrowing money because the flotation costs are lower
and the needed funds are relatively small

What is your company's weighted average flotation cost, assuming all equity is raised
externally?(Round your answer to 2 decimal places. (e.g., 32.16))

What is the true cost of building the new assembly line after taking flotation costs into account? (Enter
your answer in dollars, not millions of dollars, i.e. 1,234,567. Do not round intermediate
calculations and round your final answer ...Read More

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