is the possibility that interest rates will rise and cause a decrease in the 36. value of a fixed-income security a. Market risk interes rate risk c. Reinvestment risk d. Coupon rate risk 37. The five basic principles of finance include all of the following except: a. Cash flow is what matters. b. Money has a time value. ncremental profits determine value d. Risk requires a reward. 38. Future Gadgets Inc. expects to pay a dividend of $3.01 per share in one year. The current price of Future Gadgets' common stock is S49.92 per share. Flotation costs for issues of new common stock are 10% of market price. What is the cost of internal common equity (retained earnings) if the long-term growth in dividends is projected to be 4 percent indefinitely? a. 8.60% b. 10.03% . 13, 11% d. 14.28% 10 of 11