Flotation cost Goodbye, Inc., recently issued new securities to finance a new TV show. The project cost $10.5 million, and the company paid $750,000 in flotation costs. In addition, the equity issued had a flotation cost of 8 percent of the amount raised, whereas the debt issued had a flotation cost of 3 percent of the amount raised. If Goodbye issued new securities in the same proportion as its target capital structure, what is the company’s target debt-equity ratio?