What is the initial cost of the expansion

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Holland and Holland have a debt-equity ratio of .75. The company would like to raise new capital to cover a significant expansion that will cost $125 million. The company incurs a 10% flotation cost on new equity and a 4% flotation cost on new debt. What is the initial cost of the expansion including flotation cost would have to be raised if 50% of the total equity portion came from retained earnings and the rest of the capital came from issuing new equity and new debt?

Reference no: EM132803372

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