+1 (218) 451-4151
glass
pen
clip
papers
heaphones

When a firm has flotation costs equal to 7 percent of thefunding need, project analysts should:A.

When a firm has flotation costs equal to 7 percent of thefunding need, project analysts should:A.

When a firm has flotation costs equal to 7 percent of thefunding need, project analysts should:A. increase the project’s discount rate to offset these expensesby multiplying the firm’s WACC by 1.07.B. increase the project’s discount rate to offset these expensesby dividing the firm’s WACC by (1 – 0.07).C. add 7 percent to the firm’s WACC to get the discount rate forthe project.D. increase the initial project cost by multiplying that cost by1.07.E. increase the initial project cost by dividing that cost by (1– 0.07).