The most expensive source of capital is usually

Question

Quizplus · Accepted Answer

New common stock is typically the most expensive source of capital because it involves issuing new shares of ownership in the company, diluting the ownership of existing shareholders and potentially lowering the value of their shares. This can make it more difficult and costly to attract new investors. Preferred stock may also be expensive due to its fixed dividend payment, but it does not dilute ownership and is generally less costly than issuing new common stock. Debt and retained earnings may be less expensive sources of capital as they do not involve diluting ownership or attracting new shareholders.

The Most Expensive Source of Capital Is Usually