In Determining the Cost of Retained Earnings

question 89

Multiple Choice

In determining the cost of retained earnings

• A) the dividend valuation model is inappropriate.
• B) flotation costs are included.
• C) growth is not considered.
• D) the capital asset pricing model can be used.

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Definitions:

Implicit Premise

An underlying assumption in an argument that is not explicitly stated but is necessary for the argument to hold.

Explicit Premise

An explicit premise is a statement in an argument that is clearly and directly expressed, providing a basis for a conclusion.

Claim

An assertion, usually unsupported, about something believed to be true by the claimant.

Guidance

Advice or information aimed at resolving a problem or reaching a decision.