Which of the following equations is used to compute the dollar amount of common stock or debt that a company must issue after taking into account the flotation costs?
A. Amount of issue = (Net proceeds - Other flotation costs in dollars) / (1 - Flotation costs in decimal form)
B. Amount of issue = (Net proceeds + Other flotation costs in dollars) / (1 - Flotation costs in decimal form)
C. Amount of issue = (Net proceeds + Other flotation costs in dollars) / (1 + Flotation costs in decimal form)
D. Amount of issue = (Net proceeds - Other flotation costs in dollars) × (1 + Flotation costs in decimal form)
E. Amount of issue = (Net proceeds + Other flotation costs in dollars) × (1 - Flotation costs in decimal form)
Answer: B
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