Usually,the cost of capital for newly issued stock is ________ the cost of retained earnings.

Question

Quizplus · Accepted Answer

The cost of capital for newly issued stock is generally higher than the cost of retained earnings because issuing new stock involves additional costs such as underwriting fees, legal fees, and marketing expenses. Additionally, investors may require a higher return for investing in new shares as they perceive them as riskier than retained earnings.

Usually,the Cost of Capital for Newly Issued Stock Is ________