(16 of 17) Ch.14 - Flotation costs: 2 examples

Example 1: Calculate "weighted average flotation cost".

Example 2: Calculate "weighted average flotation cost" of the amount of money a Firm needs to raise for a new project to cover the project's initial cost. Then, use it to calculate the project's initial cost. Then, calculate the Net Present Value of the new project. For the discount rate of the project's future cash flows use the Firm's Weighted Average Cost of Capital.

[lolitazamafuze]

Thank you so much Very helpful Appreciat

[Shawn_O]

youre an awsome teacher! and you used the exactly same textbook as mine😂 super helpful on my final exam eve!!

[Gia-Gia]

Very Helpful and understandable! Thank you so much for the lecture

[gyo_]

So we never plug in fA into discount rate? Always use WACC as discount rate?