The Flotation Cost for a Company Is Computed As

question 25

Multiple Choice

The flotation cost for a company is computed as:

• A) the arithmetic average of the flotation costs of both debt and equity.
• B) the weighted average of the flotation costs associated with each form of financing.
• C) the geometric average of the flotation costs associated with each form of financing.
• D) one-half of the flotation cost of debt plus one-half of the flotation cost of equity.
• E) a weighted average based on the book values of the company's outstanding securities.

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