What is the weighted-average flotation cost for the firm

Reference no: EM13269918

Your company is considering a project that will cost $100. The project will generate after-tax cash flows of $37.50 per year for five years. The WACC is 10% and the firm's D/A ratio is .70. The flotation cost for equity is 6%, the flotation cost for debt is 3%, and your firm does not plan on issuing any preferred stock within its capital structure. If your firm follows the practice of incorporating flotation costs into the project's initial investment, what is the weighted-average flotation cost for the firm?

2.90%
3.90%
3.30%
4.30%

Reference no: EM13269918

Questions Cloud

What is the time-average poynting power density at a depth : A 100 Hz electromagnetic wave is propagating down into the sea water with an electric field intensity of |E| = 1 V /m just beneath the sea surface. What is the time-average Poynting power density at a depth of 100 m

Determine the substances work function and cutoff wavelength : Photons with wavelength 670 nm are capable of producing photoelectrons from a particular substance. Determine the substance's work function and cutoff wavelength

Health services administrator at good-patient hospital : You are a new health services administrator at Good-Patient Hospital located on the east coast of Florida. Upon reviewing different aspects of the facility, you realize that there is no facility disaster management plan in place.

What is the relative permittivity of si at the wavelength : An ND:YAG laser in the lab emits light at 1064 nm. The laser is light is directed into a slab of silicon, which has an index of refraction n = 4. a. What is the relative permittivity of Si at this wavelength (Hint: Si is non-magnetic.)

What is the weighted-average flotation cost for the firm : If your firm follows the practice of incorporating flotation costs into the project's initial investment, what is the weighted-average flotation cost for the firm?

What is the operating cash flow : Chevelle, Inc., has sales of $41,500, costs of $19,600, depreciation expense of $1,800, and interest expense of $1,000. If the tax rate is 35 percent, what is the operating cash flow, or OCF?

The great leap forward : History of Modern Asia - You need prepare paper on The Great Leap Forward

What is the resonant absorption wavelength : Consider an optical gain medium that has two levels at E 1=1.50 eV and E 2=3.50 eV. What is the resonant absorption wavelength

Find line to-neutral and line-to-line voltage phasors : A balanced positive-sequence wye-connected 60-Hz three-phase source has line-to-line voltages of VL = 208V rms. This source is connected to a balanced wye-connected load. Each phase of the load consists of an impedance of 30 + j40 *

User Account

All Pages