Question: If a firm issuing additional common equity can estimate the return investors require on its stock (k ) at 12% and knows that flotation costs

If a firm issuing additional common equity can estimate the return investors require on its stock (k ) at 12% and knows that flotation costs are about 18%, its component cost of equity capital for the new funds will be:

Select one:

A. 30.0%

B. 14.2%

C. 13.6%

D. 14.6%

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