The net new equity raised by a firm during a given year can be calculated as:
A) New equity sales minus equity repurchases plus retained earnings.
B) New equity sales minus equity repurchases plus retained earnings minus dividends paid.
C) New equity sales minus equity repurchases.
D) New equity sales plus retained earnings.
E) New equity sales minus dividends paid.

Question

Quizplus · Accepted Answer

Net new equity raised is calculated by subtracting equity repurchases from new equity sales. Retained earnings and dividends paid are not considered in this calculation, as they pertain to the allocation of net income rather than the raising of new equity capital.

The Net New Equity Raised by a Firm During a Given