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Which of the Following Equations Is INCORRECT

question 22

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Which of the following equations is INCORRECT?


Definitions:

Flotation Costs

The total costs that are incurred by a company in offering new securities to the public, including underwriting, legal, and registration fees.

WACC

Weighted Average Cost of Capital, a calculation that reflects the average rate of return a company is expected to pay its security holders.

Dividend Growth Model

A method for valuing a company's stock by using predicted dividends and adjusting them for growth to estimate future value.

Cost of Equity

Cost of equity refers to the return a company must offer investors to compensate for the risk they take by investing in the company's equity.

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