e$.$ What is the estimated cost of common equity using the DCF approach?

f$.$ What is the bond$-$yield$-$plus$-$risk$-$premium estimate for Coleman's cost of common equity?

g$.$ What is your final estimate for $r_s?$

h$.$ Explain in words why new common stock has a higher cost than retained earnings.

i$.1.$ What are two approaches that can be used to adjust for flotation costs?

$2.$ Coleman estimates that if it issues new common stock, the flotation cost will be $15\%.$ Coleman incorporates the flotation costs into the DCF approach. What is the estimated cost of newly issued common stock, considering the flotation cost?

j$.$ What is Coleman's overall, or weighted average, cost of capital $($WACC$)?$ Ignore flotation costs.

k$.$ What factors influence Coleman's composite WACC?

Should the company use the composite WACC as the hurdle rate for each of its projects? ExpLain question f solution.