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FoodMart is considering a project. The project's flotation costs amount to 9.2% of the funding need. Thus, the project analysis should Multiple Choice Increase the
FoodMart is considering a project. The project's flotation costs amount to 9.2% of the funding need. Thus, the project analysis should Multiple Choice Increase the project's discount rate to offset these expenses by multiplying the company's WACC by 1.092 0 O increase the project's discount rate to offset these expenses by dividing the company's WACC by (1 - 092) 0 ) add 9.2 percent to the company's firm's WACC to determine the discount rate for the project 0 increase the initial project cost by multiplying that cost by 1.092 0 increase the initial project cost by dividing that cost by (1 - 092) Flotation costs of a project will Multiple Choice 0 cause the project to be improperly evaluated 0 increase the net present value of the project 0 increase the project's rate of return 0 increase the initial cash outflow of the project 0 ) have no effect on the present value of the project DLink's outstanding shares of common stock have all just been bought by a group of individuals. How do we call the return these individuals require on this investment to the firm? Multiple Choice O Dividend yield Cost of equity O Capital gains yield Cost of capital Income return Pick the correct statement related to cost of equity from below. Multiple Choice O A company's overall cost of equity is generally less than its WACC given a debt-equity ratio of.5. 0 O A company's overall cost of equity is unaffected by changes in the market risk premium. O A company's overall cost of equity is directly related to the risk level of the firm. O A company's overall cost of equity is generally less than the firm's aftertax cost of debt. O O A company's overall cost of equity is inversely related to changes in the level of inflation
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