The Cost of Equity Obtained by Retaining Earnings Is Generally

question 44

True/False

The cost of equity obtained by retaining earnings is generally regarded as being the rate of return stockholders require on the firm's common stock.

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Definitions:

Extraordinary Gains

Unusual and infrequent gains that are reported separately from regular income because they result from events that are not part of the company's usual business activities.

Footnote Disclosure

Additional information provided at the bottom of financial statements, offering more detail on specific figures or accounting policies.

Statement of Retained Earnings

A financial statement that outlines the changes in a company's retained earnings over a specific period.

Expense Recognition

The accounting principle that expenses should be recognized in the period in which they contribute to revenue, following the matching principle.