What Are Flotation Costs

question 14

Multiple Choice

What are flotation costs?

• A) They are part of the capital cost calculations for all debt and equity components.
• B) They are normally ignored for long-term debt.
• C) They are not considered for retained earnings.

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Definitions:

Random Variables

Variables whose possible values are numerical outcomes of a random phenomenon.

E(X)

The expected value of the random variable X, representing the mean or average value that X takes on.

E(Y)

The expected value of the random variable Y, representing the mean or average outcome of a set of possible values weighted by their probabilities.

Covariance

A measure that indicates the extent to which two variables change together.