Trower Co has a debt to equity ratio 0.8. The co is considering a new plant...

Trower Co has a debt to equity ratio 0.8. The co is considering a new plant cost $115 million to build. flotation cost 8.5%, flotation cost of new debt 4%.

A. What is initial cost of the plant if the co raises all equity externally?

B. What is initial cost of the plant if co uses 55% retained earnings?

C. What is initial cost of plant of co uses 100% retained earnings?

Expert Solution

ekkarill92 answered 1 year ago

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