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

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

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