P14-19 Calculating Flotation Costs [LO4] Southern Alliance Company needs to

P14-19 Calculating Flotation Costs [LO4]

Southern Alliance Company needs to raise $45 million to start a new project and will raise the money by selling new bonds. The company will
generate no internal equity for the foreseeable future. The company has a target capital structure of 65 percent common stock 5 percent
preferred stock and 30 percent debt. Flotation costs for issuing new common stock are 9 percent for new preferred stock 6 percent and
for new debt 3 percent. The true initial cost figure Southern should use when evaluating its project is $. (Do not include the dollar sign ($). Do
not round the weighted average floatation cost. Round your answer to the nearest whole dollar amount. (e.g. 32))