Taking flotation costs into account will reduce the cost of new common stock. True: Taking flotation costs into account will reduce the cost of new common stock, because you will multiply the cost of new stock by 1 minus the flotation cost-similar to how the after-tax cost of debt is calculated. False: Flotation costs are additional costs associated with raising new common stock. White Lion Homebuilders is considering investing in a one-year project that requires an initial investment of $500,000. To do so, it wave rate of return that White Lion expects to earn on its project (net of its flotation costs) is (rounded to two decimal (rounded to two decimal places) should be White Lion Homebuilders Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure consists 50% preferred, and 45% equity. Determine White Lion Homebuilders's retained earnings breakpoint: $1,986,667 $1,655,556$1,572,778 $1,738,334