Winter's prefers to finance its capital spending with 40 percent debt,20 percent internal equity,and 40 percent external equity.The floatation cost of debt is 5.5 percent while it is 9.75 percent for equity.What is the weighted average flotation cost?
A) 6.10%
B) 8.28%
C) 8.49%
D) 7.63%
E) 7.90%
Correct Answer:
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