The Higher the Firm's Flotation Cost for New Common Equity

question 30

True/False

The higher the firm's flotation cost for new common equity, the more likely the firm is to use preferred stock which has no flotation cost and retained earnings whose cost is the average return on assets.

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Definitions:

Confidence

The feeling or belief in one's abilities or qualities, typically leading to a sense of self-assurance.

Positive Psychological Attributes

Traits or qualities of an individual that contribute to their overall psychological well-being, such as optimism, resilience, and gratitude.

Confidence

A belief in one's abilities and qualities, often leading to a sense of self-assurance and assertiveness.

Resilience

The capacity of individuals, systems, or organizations to recover quickly from difficulties; toughness.