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Suppose your target debt-equity ratio is 2.0. The flotation cost for equity is 6 percent, and the flotation cost for debt is 3 percent. If
Suppose your target debt-equity ratio is 2.0. The flotation cost for equity is 6 percent, and the flotation cost for debt is 3 percent. If the firm finances debt and externally, what is the weighted average flotation cost?
1%
2%
4%
3%
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