The cost of retained earnings tends to exceed the cost of issuing new stock because of the flotation costs.
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Q10: The cost of debt exceeds the cost
Q11: Retained earnings are more expensive than issuing
Q12: If a firm's optimal capital structure is
Q13: The cost of preferred stock is greater
Q14: If management substitutes new common stock for
Q16: A firm will prefer to issue preferred
Q17: The optimal capital structure minimizes the weighted
Q18: A firm may initially increase its use
Q19: The cost of preferred stock is less
Q20: The optimal capital structure minimizes the cost
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