Explain the Difference Between an "External" Sense of Meaningfulness and an "Internal

question 8

Essay

Explain the difference between an "external" sense of meaningfulness and an "internal" sense of meaningfulness. Do you find external or internal views more plausible? Why?

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Definitions:

After-Tax Cost of Debt

The net cost of debt to a company after accounting for the tax benefits of interest expenses.

CGT

Capital Gains Tax (CGT) is a tax on the profit earned from the sale of non-inventory assets that were purchased at a cost amount that was lower than the amount realized on the sale.

Flotation Cost

The total costs a company faces in issuing new securities, including underwriting, legal, and registration fees.

Cost of New Stock

The costs associated with issuing new shares of stock, including the underwriting and administrative costs.