What value should you assign as the flotation cost of internally-generated equity financing?

Question

Quizplus · Accepted Answer

The flotation cost of internally-generated equity financing is considered to be zero because there are no actual costs associated with issuing new shares of stock. Instead, the cost of retained earnings is the opportunity cost of not investing those funds in alternative investments that could generate a return for shareholders. Therefore, there is no need to assign a cost to internally-generated equity financing.

What Value Should You Assign as the Flotation Cost of Internally-Generated