BBQ Corporation has a target capital structure that is 70 percent equity, 30 percent debt. The flotation costs for equity issues are 15 percent of the amount raised; the flotation costs for debt are 8 percent. If BBQ needs $150 million for a new manufacturing facility, what is the cost when flotation costs are considered?

Multiple Choice

• $130.65 million

• $150 million

• $165.42 million

• $172.22 million

• $185 million