The Cost of Equity from Selling New Stock Is Greater

question 60

Multiple Choice

The cost of equity from selling new stock is greater than the cost of retained earnings because:

• A)selling new stock decreases the earnings per share.
• B)selling new stock increases the market price of the stock.
• C)of the flotation costs.
• D)dividends are increased.

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Definitions:

Response Cost

A behavior modification technique that involves the loss of a privilege or desired item as a consequence for undesirable behavior.

Classroom

A room or environment where teaching and learning activities occur, often within schools or educational institutions.

Desirable System

A system that is preferred or favorable due to its efficiency, effectiveness, or beneficial qualities.

Interventions

Actions taken to improve a situation, especially in health, educational, or social contexts, through direct involvement and support.