The Cost of Retained Earnings Differs from the Cost of New

question 113

Multiple Choice

The cost of retained earnings differs from the cost of new equity due to:

• A)flotation costs.
• B)dividends.
• C)capital gains yields.
• D)Both a & c
• E)All of the above

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Definitions:

Asset-Based Loan

An asset-based loan is a type of lending, often secured by a company's assets, where the loan amount is based on a percentage of the value of those assets.

Operating Lease

A contract that allows for the use of an asset but does not convey ownership rights of the asset to the lessee.

Risk Of Obsolescence

The risk that a product or service becomes outdated and undesired due to new technologies or changes in consumer preferences.

Lessor

The party in a lease agreement who owns the property and grants another party, the lessee, the right to use it for a specific period in exchange for payment.