Which of the following is FALSE? Select one: a. The cost of retained earnings is always lower than the cost of a new issue of common stock due to the absence of flotation costs when financing projects with retained earnings. b. The cost to maturity that a firm pays on its existing bonds equals the rate of return required by the market. c. The net proceeds used in calculation of the cost of long-term debt are funds actually received from the sale after paying for flotation costs and taxes. d. The cost of retained earnings is generally higher than both the cost of debt and cost of preferred sto A corporation is selling an existing asset for $26,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is ______. Select one: a. $7,720 tax liability b. $7,320 tax liability c. $9,320 tax liability d. $9,720 tax liability

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