Floatation Costs

I’m getting rather confused with some practice problems… I thought the preferable way was to ignore FC when we compute WACC and incorporate in the first year cash outflow… so why would you want to calc FC in WACC… Some problems say I’m right… when I do IGNORE WACC… but some problems tell me I;m wrong… the problem is … THE PROBLEMS DONT CLARIFY ENOUGH! Ahhh!

Post a problem

they should be included in the original cost when calc. NPV…that the pref. way in the CFA test