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Which of the following statements about flotation costs is incorrect A. Flotation costs for debt is typically lower than flotation costs for equity B. As
Which of the following statements about flotation costs is incorrect A. Flotation costs for debt is typically lower than flotation costs for equity B. As a company issues more equity the flotation costs, as a percentage of the capital raised 1) clecreases. C. Due to flotation costs on equity the WACC, is higher than WACC. D. All capital components, i.e. debt, preferred stock, retained earnings, and equity, have flotation costs. 2) What does the Break Point represent? A. The point where a firm moves from WACC, to WACC2. B. The maximum amount of capital that a firm can raise before they run out of retained earnings C. The total amount of capital that needs to be invested in a new project. D. Both A and Blare correct
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