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How much will the firm have to pay in flotation costs

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A firm has a capital structure that is 75% equity and 25% debt. They would like to buy some machinery that would cost $1,500,000. The firm has a flotation cost of equity of 6.5% and a flotation cost of debt of 5.75%. If they buy the equipment, how much will the firm have to pay in flotation costs? Assume that the firm maintains their current capital structure.

Reference no: EM132419257

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