What is the true initial cost figure company

Assignment Help Financial Management

Reference no: EM132057948

Caughlin Company needs to raise $75 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 75 percent common stock, 5 percent preferred stock, and 20 percent debt. Flotation costs for issuing new common stock are 11 percent, for new preferred stock, 8 percent, and for new debt, 3 percent.

What is the true initial cost figure the company should use when evaluating its project? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your final answer to the nearest whole dollar amount, e.g., 32.)

Reference no: EM132057948

Questions Cloud

What is the speed of the projectile : When the cannon fires, Mechano rolls backward with a recoil speed of 0.630 m/s. What is the speed of the projectile (vp) when it emerges from the cannon?

Completing a comprehensive health screening : NRS-434 In this assignment, you will be completing a comprehensive health screening and history on a young adult. To complete this assignment, do the following.

Momentum to be equal to tom momentum : A: How fast would Jerry have to be running in order for the value of his momentum to be equal to Tom's momentum?

What are the important power sources for a nurse leader : Expert power refers to such power that can influence others by using knowledge and skills. Experience knowledge and skills together make an expert power.

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

Television relative to other types of advertising media : What are the relative advantages and disadvantages of television relative to other types of advertising media?

What areas do you feel are not well addressed : Do you feel that there are enough programs funding available for children regarding mental health promotion and development issues?

Company has convertible bond in capital structure : When a company has a convertible bond in its capital structure, all of these options are correct.

Describe the type of risk management plan : Brief summary description of the type of risk management plan you selected (new employee, specific audience, community-focused, etc.)

User Account

All Pages