Retained Earnings Costs Are Lower Than the Costs of Newly

question 28

True/False

Retained earnings costs are lower than the costs of newly issued equity since a new issue will have flotation costs.

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Definitions:

Statement of Cash Flows

A financial statement that shows the cash inflows and outflows for a business over a specified period.

Retained Earnings

The amount of net earnings left over for the company after it has paid out dividends to its shareholders.

Dividend Declarations

The announcement by a company's board of directors to pay a dividend to its shareholders, specifying the amount and date.