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The reason why reinvested earnings have a cost equal to the required rate of return is because investors expect to earn on those funds, what they earn on new projects or purchases of other firms. This
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The reason why reinvested earnings have a cost equal to the required rate of return is because investors expect to earn on those funds, what they earn on new projects or purchases of other firms. This is called opportunity costs.True / False.

User Sojin
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true the investors expect to earn on those funds

User Mfloryan
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