Thinking Hat would like to start a new project which will
require $21 million in the initial cost. The company is planning to
raise this amount of money by selling new corporate bonds. It will
generate no internal equity for the foreseeable future. Thinking
Hat has a target capital structure of 65 percent common stock, 12
percent preferred stock, and 23 percent debt. Flotation costs for
issuing new common stock are 10 percent, for new preferred stock,
10 percent, and...