Cost of new common stock: which are the correct answers?

5. Cost of new common stock M Aa a represent the fees that firms pay to investment bankers to help them issue new common stock. Dividends Flotation costs True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. Taking flotation costs into account will reduce the cost of new common stock. 0 True: Taking flotation costs into account will reduce the cost of new common stock, because you will multiply the cost of new common stock by 1 minus the flotation costsimilar to how the after-tax cost of debt is calculated. 0 False: Flotation costs are additional costs associated with raising new common stock. White Lion Hornebuilders has a current stock price of $33.35 per share. and is expected to pay a per-share dividend of $2.45 at the end of next year. The company's earnings\" and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If white Lion expects to incur flotation costs of 3.?50% of the value of its newly-raised equity funds. then the flotation-adjusted {net} cost of its new common stock {rounded to two decimal places} should be Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $T45,DCICI. Its target capital structure consists of 55% debt, 5% preferred, and 60% equity. Determine Sunny Dayr Manufacturing Company's retained earnings breakpoint: 0 $1,241.55? 0 $1,552,034 0 $1.303.2so 0 $2,123,521