171k views
5 votes
The cost of raising capital through retained earnings is__________ the cost of raising capital through issuing new common stock.

User Buglinjo
by
5.7k points

1 Answer

4 votes

Answer:

less

Step-by-step explanation:

flotation costs are the cost incurred when issuing new common stock.

there are no flotation cost when using retained earnings to raise new capital.

User Paschover
by
4.8k points