True: Taking flotation costs into account will reduce the cost of new common stock, because you will multiply the cost of new common stock by 1 minus the flotation cost-similar to how the after-tax cost of debt is calculated. False: Flotation costs are additional costs associated with raising new common stock. White Lion Homebuilders is considering investing in a one-year project that requires an initial investment of $500,000. To do so, it will have to issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $550,000. The rate of return that White Lion expects to earn on its project (net of its flotation costs) is (rounded to two decimal places). 7.84% Alpha Moose Transporters has a current stock price of $33.35 per share, and is expected per-share dividend of $1.36 at the end of the year. The company's earnings' and dividends' growth rate are expected to grow at the constar 7.06% 9.40% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, th tation-adjusted (net) cost of its new common stock 6.27% (rounded to two decimal places) should be 5.49% White Lion Homebuilders Co.'s addition to earnings for this year is expected to be $857,000. Its target capital structure consists of 35% debt, 5% preferred, and 60% equity. Determine White Lion Homebuilders's retained earnings breakpoint: O $1,571,166 O $1,428,333 O $1,356,916 $1,714,000