Higher flotation costs will result in all of the following EXCEPT 1) higher weighted average cost of capital 2) higher cost of retained earnings 3) higher after-tax cost of debt 4) higher cost of common equity when new common shares are sold Question 8 (Mandatory) (7.14285 points) Is there a floatation cost in retained earnings? 1) False 2) True The cost of capital is the rate that must be earned on an investment project if the project is to increase the value of the common shareholders' investment. 1) False 2) True Question 11 (Mandatory) (7.14285 points) Theoretically, a company's cost of capital is equal to a weighted average of its investors' required returns. 1) False 2) True