All of the Following Methods Can Be Used to Estimate

question 117

Multiple Choice

All of the following methods can be used to estimate the cost of equity except:

• A)Like debt and preferred stock, cash flows from common equity are fixed.
• B)Firms have two sources of common equity, retained earnings and new stock issues, but only one single cost of common equity.
• C)From the shareholders' perspective, the opportunity cost of retained earnings is the return the shareholders could earn by investing the funds in long-term treasury securities.
• D)If the firm cannot invest its retained earnings to achieve a sufficient risk-adjusted return, shareholders would be better off receiving additional shares of stock.
• E)None of the above statements are correct.
• Clone of 2 prior items

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Definitions:

Grams

A metric unit of mass equal to one thousandth of a kilogram.

Mass

A measure of the amount of matter in an object, often quantified in units like kilograms or grams.

Material

Substance or substances out of which a thing is or can be made.

Nonliving Things

Objects or substances that do not possess life, characterized by an inability to grow, metabolize, respond to stimuli, reproduce, or adapt.