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papahomer papahomer
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7 years ago
Jen and Barry's Ice Cream needs $20 million in new capital to expand its production facilities. It will use 40% debt and 60% equity. The company's after-tax cost of debt is 5% and the cost of equity is 12.5%. Flotation costs will be 3% for debt and 9% for equity. What rate should be used to discount the cash flows from the expansion project?
A) 6.6%
B) 6.0%
C) 9.5%
D) 16.1%
Textbook 
Financial Management: Principles and Applications

Financial Management: Principles and Applications


Edition: 13th
Authors:
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David_hessDavid_hess
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papahomer Author
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7 years ago
Just got PERFECT on my quiz
fgarza2146
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
einstein
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2 hours ago
Thank you, thank you, thank you!
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