When calculating the cost of common equity, it is important to consider the common stock and retained earnings accounts separately.

Name: When calculating the cost of common equity, it is important to consider the common stock and retained earnings accounts separately.
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Quizplus · Accepted Answer

When calculating the cost of common equity, the focus is on the cost to the company to issue new shares or the returns expected by investors, not on the accounting treatment of common stock and retained earnings.

When Calculating the Cost of Common Equity, It Is Important