Briefly Explain the Important Contingencies of Path-Goal Theory

question 61

Essay

Briefly explain the important contingencies of path-goal theory.

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Definitions:

Pretax Cost

This refers to an expense or cost incurred by a business before accounting for taxes.

WACC

The Weighted Average Cost of Capital represents a method for determining a company's capital cost, with each type of capital being weighted according to its proportion.

Cost of Retained Earnings

The opportunity cost to shareholders for having a company retain earnings instead of paying them out as dividends.

Flotation Costs

Expenses incurred by a company in issuing new securities, including legal, administrative, and underwriting fees.