How do we account for Flotation costs of equity when cost of equity is to be determined as per CAPM model where we have all the data?
Trading Gamer (2 Points)
27 February 2023How do we account for Flotation costs of equity when cost of equity is to be determined as per CAPM model where we have all the data?
Yasaswi Gomes new
(Finance )
(4474 Points)
Replied 28 February 2023
My version is simple
Dr. Issue proceeds (bank)
Dr. Issue flotation expenses
Cr bank
Cr. Capital
NPV capm calculations dont get impacted but these costs will add up to initia cash outflow reducing projects NPV.
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