Been studying this question for awhile, and am having difficulty understanding it. Would really appreciate any help. Thx!

Which of the following statements is true about the flotation costs that are incurred when a firm issues new securities to raise funds?

The higher the flotation costs associated with a preferred stock issue, the lower the firm's cost of preferred stock, r_ps.

Flotation costs should be added to the per share price of a preferred stock issue to compute the cost of preferred stock, r_ps.

Floatation costs should be added to the before-tax weighted average cost of capital to determine the firm's overall net weighted average cost of capital after taxes.

When it incurs flotation costs, the firm normally receives a higher amount of net proceeds from a security issue than when there are no flotation costs.

Floatation costs increase the cost of using funds; e.g., the cost of issuing new common stock is greater than the cost of retained earnings because the firm must pay flotation costs to issue new equity.