QUESTION 3 points Save Answer Which of the following statements is CORRECT? O a The percentage flotation cost associated with issuing new common equity is typically smaller than the flotation cost for new debt. Ob. The WACC as used in capital budgeting is an estimate of a company's before-tax cost of capital. Oc. The WACC as used in capital budgeting would be simply the after-tax cost of debt if the firm plans to use only debt to finance its capital budget during the coming year Od. The WACC as used in capital budgeting is an estimate of the cost of all the capital a company has raised to acquire its assets. Oe. There is an "opportunity cost" associated with using reinvested earnings, hence they are not "free." QUESTION 4 1 pointsSave Answer With its current financial policies, Flagstaff Inc. will have to issue new common stock to fund its capital budget. Since new stock has a higher cost than reinvested earnings, Flagstaff would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock? o Increase the dividend payout ratio for the upcoming year. Ob. Increase the proposed capital budget Oc. Increase the percentage of debt in the target capital structure. od. Reduce the arnount of short-term bank debt in order to increase the current ratio. e. Reduce the percentage of debt in the target capital structure