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Calculate the cost of the plant including flotation costs

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Turtle Co. has a debt-to-equity ratio of 0.85. The company is considering a new plant that will cost $250 million to build. When the company issues new equity, it incurs a flotation cost of 10%. The flotation cost on new debt is 3%.

Problem a. Calculate the weighted average flotation costs. (Enter percentages as decimals and round to 3 decimals)

Problem b. Calculate the cost of the plant including flotation costs.

Reference no: EM132950933

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