The company should use when evaluating project

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Southern Star Company needs to raise $60 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Flotation costs for issuing new common stock are 8 percent, for new preferred stock, 5 percent, and for new debt, 3 percent.

What is the true initial cost figure the company should use when evaluating its project?

True initial cost $

Reference no: EM131915443

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