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

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Definitions:

Good Genes Model

A hypothesis in sexual selection suggesting that individuals choose mates on the basis of traits that indicate genetic quality, leading to enhanced survival or reproductive success in offspring.

Material Benefits

Material benefits are tangible resources or goods that individuals gain, which can contribute to their survival or reproductive success.

Direct Benefits

Advantages received immediately by individuals from a particular behavior, increasing their survival or reproduction.

Material Benefits

Tangible advantages or goods obtained from actions, decisions, or relationships, such as food, shelter, or items of economic value.