17 & 20

for acceptance of the project. The second approach involves adjusting the cost of common equity as follows: Cost of equity from new stock =re=P0(1F)D1+g The difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment resents Round your answer to two decimal places. % % WACC calculation. However, if the firm will have to issue new common stock, the cost of new common stock should be used in the firm's WACC calculation. \% What is the firm's weighted average cost of capital (WACC 2 ) if it has to issue new common stock? Do not round intermediate calculations. Round your answer to two decimal places. %