Corporations have two costs of common equity,one for retained earnings and one if the company issues new common stock.

Name: Corporations have two costs of common equity,one for retained earnings and one if the company issues new common stock.
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Quizplus · Accepted Answer

This is true. Retained earnings typically have a lower cost of equity because they do not involve the issuance of new shares and do not incur flotation costs, while issuing new common stock incurs flotation costs and often results in a higher cost of equity.

Corporations Have Two Costs of Common Equity,one for Retained Earnings