What the true cost of building the new assembly line

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Reference no: EM131548210

Suppose your company needs $2.4 million to build a new assembly line. Your target debt-quity ratio is., 50. The flotation cost for new equity is 14 percent, but the flotation cost for debt is only 4 percent. Your boss has decided to fund the project by borrowing money, since the flotation costs are lower and needed funds are relatively small. What the true cost of building the new assembly line?

Reference no: EM131548210

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