Please explain in a paragraph why the highlighted answer is the correct answer. For each incorrect answer please explain in a paragraph why it is incorrect.

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11. Which one of the following statements is true? a. Bond flotation costs are typically large compared to stock flotation costs and must be considered when calculating the required return on debt capital. b. . Preferred stock flotation costs are very small compared to bond flotation costs and are typically ignored in cost of capital calculations. c. Bond flotation costs reduce the return on bonds by providing a kick back to the company issuing the bonds. d. Common stock with high flotation costs is more attractive to investors than common stock without flotation costs because high flotation costs come from large payments to investors. e. Common stock flotation costs increase the required return on equity capital because they reduce the proceeds from issuing new common stock