Since Retained Earnings Are Viewed as a Fully Subscribed Issue

question 6

Multiple Choice

Since retained earnings are viewed as a fully subscribed issue of additional common stock, the cost of retained earnings is ________.

• A) less than the cost of new common stock equity
• B) equal to the cost of new common stock equity
• C) greater than the cost of new common stock equity
• D) not related to the cost of new common stock equity

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Definitions:

Critical Thinking

Actively and proficiently envisioning, implementing, scrutinizing, amalgamating, and judging information to come to a decision or conclusion.

Free Society

A society where individuals have the freedom to choose, express, and live as they wish, with minimal government intervention.

Open Society

A term coined by philosopher Karl Popper, referring to a society where government action is transparent, civil liberties are protected, and there is the opportunity for social and political change.

Critical Thinking

Purposefully dissecting and reviewing a topic to determine an outcome.