The cost to issue new debt is 3% and new equity is 7%. The company is considering projects totalling $100 million next year and they wish to maintain a D/E ratio of 1. Internal funds of $50 million are available. What is the company's weighted average flotation costs (Fa)?

Answer rating: 100% (QA)

To calculate the weighted average flotation costs Fa for the company we need to consider the flotati... View the full answer