True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. The cost of issuing new common stock is calculated the same way as the cost of raising equity capital from retained earnings. Folse: Flotation costs need to be taken into account when calculating the cost of issuing new common stock, but they do not need to be taken into account when raising capital from retained earnings. True: The cost of retained earnings and the cost of new common stock are calculated in the same manner, except that the cost of retained eamings is based on the firm's existing common equity, while the cost of new common stock is based on the value of the firm's share price net of its flotation cost. Sunny Day Manufocturing Company is considering investing in a one-year project that requires an initial investment of $450,000. 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 $550,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is places). White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeabie future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the fotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it 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 $550,000. The rate of retirn that Sunny Day expects to earn on its project (net of its flotation costs) is (rounded to two decima places). White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If White Lio expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common s (rounded to two decimal places) should be Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure consists of 50\% debt, 5% preferred, and 45% equity. Determine Sunny Day Manufacturing Company's retained earnings breakpoint: $1,655,556$1,738,334$1,490,000$1,986,667 True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. The cost of issuing new common stock is calculated the same way as the cost of raising equity capital from retained earnings. False: Flotation costs need to be taken into account when calculating the cost of issuing new common stock, but they do not need to be taken into account when raising capital from retained earnings. True: The cost of retained eamings and the cost of new common stock are calculated in the same manner, except that the cost of retained earnings is based on the firm's existing common equity, while the cost of new common stock is based on the value of the firm's share price net of its flotation cost. Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. 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 5550,000 . The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is places). Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it will 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 $550,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is places). (rounded to two decimal White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5 .20\% into the foreseeable future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new conmon stock (rounded to two decirnal places) should be Sunny Day Manufacturing Company Co.'s a 14.28% arningh for this year is expected to be $745,000. Its target capital structure consists of 50% debt, 5\%, preferred, and 45% equity, Deter 12.55\% y Day Manufacturing Company's retained earnings breakpoint: 51,73B,334 $1,490,000 $1,986,667 Iting in a one-year project that requires an initial investment of $450,000. To do so, $550,000. The rate of retum that Sunny Day expects to earn on its project (net of its flotation costs) is places). White Lion Homebuidiers has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the y The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeabie future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common st. (rounded to two decimal places) should be Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure cansists of 50\% debt, 5% preferred, and 45% equity, Determine Sunny Day Manufacturing Company's retained earnings breakpoint: $1,655,556$1,738,334$1,490,000$1,986,667 True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. The cost of issuing new common stock is calculated the same way as the cost of raising equity capital from retained earnings. Folse: Flotation costs need to be taken into account when calculating the cost of issuing new common stock, but they do not need to be taken into account when raising capital from retained earnings. True: The cost of retained earnings and the cost of new common stock are calculated in the same manner, except that the cost of retained eamings is based on the firm's existing common equity, while the cost of new common stock is based on the value of the firm's share price net of its flotation cost. Sunny Day Manufocturing Company is considering investing in a one-year project that requires an initial investment of $450,000. 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 $550,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is places). White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeabie future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the fotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it 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 $550,000. The rate of retirn that Sunny Day expects to earn on its project (net of its flotation costs) is (rounded to two decima places). White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If White Lio expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common s (rounded to two decimal places) should be Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure consists of 50\% debt, 5% preferred, and 45% equity. Determine Sunny Day Manufacturing Company's retained earnings breakpoint: $1,655,556$1,738,334$1,490,000$1,986,667 True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. The cost of issuing new common stock is calculated the same way as the cost of raising equity capital from retained earnings. False: Flotation costs need to be taken into account when calculating the cost of issuing new common stock, but they do not need to be taken into account when raising capital from retained earnings. True: The cost of retained eamings and the cost of new common stock are calculated in the same manner, except that the cost of retained earnings is based on the firm's existing common equity, while the cost of new common stock is based on the value of the firm's share price net of its flotation cost. Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. 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 5550,000 . The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is places). Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it will 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 $550,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is places). (rounded to two decimal White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5 .20\% into the foreseeable future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new conmon stock (rounded to two decirnal places) should be Sunny Day Manufacturing Company Co.'s a 14.28% arningh for this year is expected to be $745,000. Its target capital structure consists of 50% debt, 5\%, preferred, and 45% equity, Deter 12.55\% y Day Manufacturing Company's retained earnings breakpoint: 51,73B,334 $1,490,000 $1,986,667 Iting in a one-year project that requires an initial investment of $450,000. To do so, $550,000. The rate of retum that Sunny Day expects to earn on its project (net of its flotation costs) is places). White Lion Homebuidiers has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the y The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeabie future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common st. (rounded to two decimal places) should be Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure cansists of 50\% debt, 5% preferred, and 45% equity, Determine Sunny Day Manufacturing Company's retained earnings breakpoint: $1,655,556$1,738,334$1,490,000$1,986,667