In cost of capital calculations,the flotation cost on new debt is usually ignored because the flotation cost percentage for large debt issues is relatively low.

Name: In cost of capital calculations,the flotation cost on new debt is usually ignored because the flotation cost percentage for large debt issues is relatively low.
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Flotation costs for large debt issues are typically low, often less than 1%, and are therefore often considered negligible in cost of capital calculations.

In Cost of Capital Calculations,the Flotation Cost on New Debt