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Coal Flotation Cost

Cost of New Equity Cost of Existing Equity 22.64-22.0 0.64 It results in an increase in the cost of new equity by 0.64.. This approach is not accurate and does not depict the actual picture since it includes the flotation costs into the cost of equity.Issuance of new stocks in the market involves a one-time expense and this approach only inflates the cost of capital.

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