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What is the company target debt-equity ratio

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Reference no: EM132805780

Problem 1: Alright Company recently issued new securities to finance a new investment project. The project cost $23.6 million, and the company paid $1,950,000 in flotation costs. In addition, the equity issued had a flotation cost of 8.5 percent of the amount raised, whereas the debt issued had a flotation cost of 5.5 percent of the amount raised. If Alright company issued new securities in the same proportion as its target capital structure, what is the company's target debt-equity ratio?

Reference no: EM132805780

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