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Calculate the weighted average flotation costs

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Hummus Inc. has a debt to equity ratio of 0.40. The company is considering a new plant that will cost $150 million to build. When the company issues new equity, it incurs a flotation cost of 8%. The flotation cost on new debt is 3%.

1. Calculate the weighted average flotation costs. (Enter percentages as decimals and round to 4 decimals)

2. Calculate the cost of the plant including flotation costs. (Round to 2 decimals)

Reference no: EM132502550

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