The Cost of Equity from Selling New Stock Is Greater

question 60

Multiple Choice

The cost of equity from selling new stock is greater than the cost of retained earnings because:

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

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Definitions:

FTC

The Federal Trade Commission, a U.S. government agency focused on consumer protection and maintaining competition.

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A printed listing of individuals' and organizations' telephone numbers, addresses, and sometimes additional information, grouped geographically.