11. Which of the following statements about flotation costs is incorrect:

Flotation costs for debt is typically lower than flotation costs for equity.

As a company issues more equity the flotation costs, as a percentage of the capital raised, decreases.

Due to flotation costs on equity the WACC₂ is higher than WACC₁.

All capital components, i.e. debt, preferred stock, retained earnings, and equity, have flotation costs.

Flotation costs represents a payment to investment banks for their services.