If a Firm Has Flotation Costs of 20% and Does

question 179

Multiple Choice

If a firm has flotation costs of 20% and does not want to pay more than 17% return for a particular security issue. What rate of return is the firm willing to offer the investor?

• A)3.4%
• B)13.6%
• C)20.4%
• D)21.25%

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Definitions:

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