What is the true initial cost figure southern should use


Southern Alliance Company needs to raise $21 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 50 percent common stock, 11 percent preferred stock, and 39 percent debt. Flotation costs for issuing new common stock are 14 percent, for new preferred stock, 8 percent, and for new debt, 4 percent. What is the true initial cost figure Southern should use when evaluating its project?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the true initial cost figure southern should use
Reference No:- TGS02689540

Expected delivery within 24 Hours