Retained Earnings Has a Cost Associated with It Because

question 11

Multiple Choice

Retained earnings has a cost associated with it because:

• A) new funds must be raised.
• B) there is an opportunity cost associated with shareholder funds.
• C) K_e > g.
• D) flotation costs increase the cost of funding.

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Definitions:

Negation

A compound statement whose truth value is the opposite truth value of its component statement.

Disjunction

A logical operation that results in true if at least one of its premises is true.

Conditional

A logical statement that has the form "If A then B," implying B is true if A is true.

Biconditional

A logical statement of the form "if and only if", showing that both conditions must be true or both false.