Why Does a New Issue of Common Stock Have a Higher

question 85

Multiple Choice

Why does a new issue of common stock have a higher cost of capital than retained earnings?

• A)New common stock has floatation costs.
• B)Existing common shareholders have seniority over new common shareholders.
• C)New common stock must pay a higher dividend.
• D)Retained earnings pertains to cash which has a zero cost of capital.

Understand the significance of problem finding in the process of creativity.

Realize the impact of cultural and social discrimination on intelligence test scores.

Grasp the concept of environmental influences on generational changes in IQ scores.

Understand the concept and application of divergent thinking in generating new ideas.

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Definitions:

Market Share

The percentage of total sales volume in a market captured by a brand, product, or company.

Interfere

Interfere refers to the act of intervening or meddling in the affairs or actions of others, often leading to obstruction or hindrance.

Predatory Behavior

Predatory behavior involves unethical or exploitative tactics to take advantage of someone weaker or in a more vulnerable position.

Intentional Deceit

The act of deliberately misleading or deceiving someone, often for personal gain or to deceive.