The Best Way to Adjust for the Existence of flOtation

question 332

True/False

The best way to adjust for the existence of flotation costs is to add their percentage cost to the
WACC.

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Definitions:

International Monetary Fund

An international organization created to promote global monetary cooperation, secure financial stability, facilitate international trade, and reduce poverty around the world.

World Bank

An international monetary body that supplies loans and grants to the administrations of less wealthy nations for capital project development.

Dependency Theorist

Scholars who analyze international relations in terms of the dependence of developing countries on industrialized nations, explaining global inequalities in economic development and power dynamics.

Modernization Theorist

A scholar who believes in the process whereby societies move from traditional or less developed institutions to those characteristic of more developed societies.