Which of the Following Equations Is Used to Compute the Dollar

question 32

Essay

Which of the following equations is used to compute the dollar amount of common stock or debt that a company must issue after taking into account the flotation costs?
a. Amount of issue $= ($ Net proceeds - Other flotation costs in dollars $) / ( 1 -$ Flotation costs in decimal form $)$
b. Amount of issue $= ($ Net proceeds + Other flotation costs in dollars $) / ( 1 -$ Flotation costs in decimal form $)$
c. Amount of issue $= ($ Net proceeds + Other flotation costs in dollars $) / ( 1 +$ Flotation costs in decimal form $)$
d. Amount of issue $= ($ Net proceeds - Other flotation costs in dollars $) \times ( 1 +$ Flotation costs in decimal form $)$
e. Amount of issue $= ($ Net proceeds + Other flotation costs in dollars $) \times ( 1 -$ Flotation costs in decimal form $)$

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Definitions:

Elaboration Likelihood Model

A theory in social psychology that proposes two primary pathways of persuasion: a central route and a peripheral route.

Heuristic/Systematic Model

Theory that posits two routes to persuasion, via either conscious or automatic processing.

Personal Relevance Theory

A theory suggesting that people are more likely to be persuaded by messages that they find personally relevant or meaningful.

Peripheral Cue

A type of stimulus in persuasion that influences a person's attitude or behavior through indirect or secondary features, rather than the central message itself.