Being Human, Inc., recently issued new securities to finance a new TV show. The project cost $14.5 million, and the company paid $775,000 in flotation costs. In addition, the equity issued had a flotation cost of 7.5 percent of the amount raised, whereas the debt issued had a flotation cost of 3.5 percent of the amount raised. If the company issued new securities in the same proportion as its target capital structure, what is the company’s target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e. g., .1616.)

1.54

Explanation:

Based on the information given in the question, the company’s target debt-equity ratio will be:

The total costs will be:

= $14.5 million + $775000

= $15.275 million

Since amount needed = amount raised × (1-fT)

Therefore, 15.275 × (1-f) = 14.5

15.275 - 15.275f = 14.5

f = floatation costs = 5.074%

Therefore, 5.074% × (1 + D/E) = 7.5% + (D/E) × 3.5%

Solving for debt-equity ratio, the value will be = 1.54

3rd the reason why is because of management and leadership

these are the four factors that influence enterpreneurship development

1. economic development

2. culture

3.technological development

4. education