Retained earnings
A) have no cost
B) are the firm's cheapest source of funds
C) have a cost that equals the cost of capital
D) are cheaper than the cost of new common stock
Correct Answer:
Verified
Q21: A firm can initially increase its use
Q22: Preferred stock increases common stockholders' return
A) more
Q23: If the marginal cost of capital rises,
Q24: If the dividend growth model is used,
Q25: As a firm increases its use of
Q27: The effective cost of debt is reduced
Q28: The effective cost of debt depends on
1)
Q29: Debt financing is more risky for firms
Q30: The optimal capital structure involves
A) maximizing the
Q31: The marginal cost of capital rises
1) because
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