Answered: xplain in words why new common stock…

xplain in words why new common stock thatis raised externally has a higher percentage costthan equity that is raised internally by retainingearnings.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 14MC

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xplain in words why new common stock that
is raised externally has a higher percentage cost
than equity that is raised internally by retaining
earnings.

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