Question: Question 12 8 pts If you do not know a particular answer please make a reasonable assumption and state that you have assumed the answer
Question 12 8 pts If you do not know a particular answer please make a reasonable assumption and state that you have assumed the answer (Chapter 13 - Short-answer question. Use the following information to answer questions 12 to 15.) You are the CEO of Caesar Little. You are considering a project with an initial investment of $750,000. The annual cash flow of the project is 78,000 that continues forever (perpetuity) and the discount rate is 10 percent. The company can issue equity at a flotation cost of 5.5 percent and debt at 3.00 percent. The firm currently has a debt-equity ratio of 0.70. The firm is considering two scenarios. First, all funds will be raised externally. Second, sixty (60. percent of equity will come from retained earnings (internal sources). What should the firm use as their weighted average flotation cost for the two scenarios
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