True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. If a firm needs additional capital from equity sources once its retained earnings breakpoint is reached, it will have to raise the capital by issuing new common stock. False: Firms raise capital from retained earnings only when they cannot issue new common stock due to market conditions cutside of their control. True: Firms will raise all the equity they can from retained earnings before issuing new common stock, because capital from retained earninos is cheaper than capital ralsed from issuing new common stock. Aloha Moose Transporters is considering ievesting in a one-vear project that requires an initial investment of 3475,000 . To do so, it will have to issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of 3595,000 . The rate de return that Alpha Monse expects to earn on its project (net of its fotation costs) is (founded to two decimal places). Sunny Dax Mahufacturing Company has a current stock price of \$33.35 per stare, and is expected to pay a per-share dividend of 32.03 at the end of the veat, The company's earningt' and cevidends' growth rate are expected to grow ot the constant rate of 9.40. into the faresevable future. If Surny Dxy expects to hour floctation costs of 5.005 so of the value of its newly. raised equity funds, then the flotation - adfusted (net) cast of its new common? thock (rositides to two dedmal places) thould be Alpha Moose Transporters Co.'s addition to earnings for this year is expected to be $420,000. fts target capital structure consists of 35% debt, 5% preferred, and 60% equity. Determine Alpha Moose Transporters's retained eamings breakpoint: 5875,000 5665,000 $700,000 3805,000