The out-of-pocket cost of common stock is a good approximation of the cost of common stock equity.
Flotation costs for new stock issues must be considered in the valuation, unlike existing stock.

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The Answer of The out-of-pocket cost of common stock is a good approximation of the cost of common stock equity.
Flotation costs for new stock issues must be considered in the valuation, unlike existing stock.

The Out-Of-Pocket Cost of Common Stock Is a Good Approximation