The Cost of External Equity Is Greater Than the Cost

question 53

Multiple Choice

The cost of external equity is greater than the cost of internal equity because ____.

• A) it decreases the earnings per share
• B) it increases the market price of the stock
• C) of the flotation costs
• D) dividends are increased

---

Definitions:

Ethical Preferences

Individual or collective choices based on principles of right and wrong, often influencing behavior and decision-making.

Origin

The beginning or cause of something; where something comes from.

Virtue Ethics

An ethical theory that emphasizes an individual's character as the key element of ethical thinking, rather than rules or consequences.

Moral Excellence

The quality of performing actions that are considered ethically good or virtuous, often associated with integrity, honesty, and uprightness.