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Author Question: Which of the following statements is correct regarding preferred stock floatation costs and the cost ... (Read 42 times)

olsonmanny@gmail.com

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Question 1

Which of the following is not a capital component when calculating the WACC?

long-term debt


common stock


accounts receivable


preferred stock



Question 2

Which of the following statements is correct regarding preferred stock floatation costs and the cost of preferred share equity?

The lower the flotation costs, the higher the required rate of return.


The higher the flotation costs, the lower the required rate of return.


The higher the flotation costs, the higher the required rate of return.


There is no specific relationship between the flotation costs and required rate of return.



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Marked as best answer by olsonmanny@gmail.com on Aug 7, 2023

butterfly17

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olsonmanny@gmail.com

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Reply 2 on: Aug 7, 2023
Excellent


lindahyatt42

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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