Even if a firm obtains all of its common equity from retained earnings,its MCC schedule might still increase if very large amounts of new capital are needed.

Name: Even if a firm obtains all of its common equity from retained earnings,its MCC schedule might still increase if very large amounts of new capital are needed.
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Question

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This is because the cost of new capital, such as debt or preferred stock, may be higher than the cost of retained earnings, causing the overall MCC schedule to increase.

Even If a Firm Obtains All of Its Common Equity