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Theodore Inc. has a capital structure made up of 50% in common equity, 40% in debt and 10% in preferred equity. The flotation cost for

Theodore Inc. has a capital structure made up of 50% in common equity, 40% in debt and 10% in preferred equity. The flotation cost for common equity is 3%, for preferred equity is 4%, and for debt is 2%. What is the weighted average flotation cost facing Theodore Inc.?

a)1.9%

b)2.3%

c)3.3%

d)2.9%

e)2.7%

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