Question: (6) Coleman estimates that if it issues new common stock, the flotation cost will be 15%. Coleman incorporates the flotation costs into the DCF approach.

(6) Coleman estimates that if it issues new common stock, the flotation cost will be 15%. Coleman incorporates the flotation costs into the DCF approach. What is the estimated cost of newly issued common stock, considering the flotation cost? % Flotation cost Net proceeds after flotation rs (7) What is Colemans overall, or weighted average, cost of capital (WACC)? Ignore flotation costs. wd 30% wp 10% WACC = wc 60%

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