What Value Should You Assign as the Flotation Cost of Internally

Multiple Choice

What value should you assign as the flotation cost of internally generated equity financing?

A) A cost that yields the company's required rate of return on the funds utilized
B) Fifty percent of the external flotation cost of equity
C) A cost of zero
D) The same cost as that of the external equity financing
E) The same cost as that of the debt financing