Question: Help! so is this suggesting external equity is debt? and can you help calculate it? F o = S/V * f S + B/V *

Help! so is this suggesting "external equity" is debt? and can you help calculate it?

F_o = S/V * f_S+ B/V * f_Bthis is the formula the book is using.. thank you

a company has a debt-equity ratio of .75. The company is considering a new plant that will cost $125 million to build. When the company issues new equity, it incurs a flotation cost of 10%. The flotation cost on new debt is 4%. What is the initial cost of the plant if the company raises all equity externally?

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