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The flotation cost for a firm is computed as: The arithmetic average of the flotation costs of both debt and equity. The weighted average of
The flotation cost for a firm is computed as:
The arithmetic average of the flotation costs of both debt and equity. |
The weighted average of the flotation costs associated with each form of financing. |
The geometric average of the flotation costs associated with each form of financing. |
One-half of the flotation cost of debt plus one-half of the flotation cost of equity. |
A weighted average based on the book values of the firm's debt and equity. |
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