The measurement of common stock equity in weighted average cost of capital uses the cost of retained earnings (K_e) ,but not the cost of new common stock (K_n).
Either or both may be used; it is situation-dependent.

Question

Quizplus · Accepted Answer

The Answer of The measurement of common stock equity in weighted average cost of capital uses the cost of retained earnings (K_e) ,but not the cost of new common stock (K_n). Either or both may be used; it is situation-dependent.

The Measurement of Common Stock Equity in Weighted Average Cost