As the Size of a Financing Issue Increases, the [Blank]

question 42

Multiple Choice

As the size of a financing issue increases, the [blank] usually decreases on a percentage basis.

• A)cost of equity
• B)flotation cost of the issue
• C)effective tax rate
• D)both A and B

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Definitions:

Common Ratio

The common ratio in a geometric sequence is the constant factor between consecutive terms.

Geometric Sequence

A sequence of numbers where each term after the first is found by multiplying the previous one by a fixed, non-zero number called the common ratio.

Geometric Sequence

An ordered list of numbers in which every term succeeding the initial one is obtained by multiplying the preceding term by a constant, non-zero value known as the ratio.

Nth Term

The term located at position n in a sequence, where n represents a particular position number.