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Imagine a child who consistently gets mediocre grades and is often picked last for a team when games are played at recess. However, he likes to make silly jokes and pranks, and he notices that people laugh when he does those things. The child starts to think that others are laughing with him, not at him. This is part of the process that Charles Cooley called:
WACC
A calculation of a firm's cost of capital in which each category of capital is proportionately weighted, used to evaluate investment opportunities.
Flotation Costs
Flotation costs are the total costs incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees.
Net Present Value
A calculation that discounts future cash flows back to their present value to evaluate and compare the profitability of investments or projects.
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