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    Practical Financial Management Study Set 1
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    Exam 13: Cost of Capital
  5. Question
    If a Firm Has Flotation Costs of 20% and Does
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If a Firm Has Flotation Costs of 20% and Does

Question 179

Question 179

Multiple Choice

If a firm has flotation costs of 20% and does not want to pay more than 17% return for a particular security issue. What rate of return is the firm willing to offer the investor?


A) 3.4%
B) 13.6%
C) 20.4%
D) 21.25%

Correct Answer:

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