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Judson Inc. recently issued new securities to finance a new TV show. The project cost $15.0 million, and the company paid $825,000 in flotation costs. In addition, the equity issued had a flotation cost of 8.0 percent of the amount raised, whereas the debt issued had a flotation cost of 4.0 percent of the amount raised. If Judson issued new securities in the same proportion as its target capital structure, what is the company’s target debt/equity ratio?

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Financial Management, Finance

Category:- Financial Management
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