Quiz Ch 10 – T/F Cost of External Equity from New Stock Issuance

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: The cost of external equity capital raised by issuing new common stock (re) is given by dividing the cost of equity capital from retained earnings (rs) by (1 - F), where F is the percentage flotation cost.

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  • Search Terms: a. b. false true "the ( (re) (rs), - as by capital common cost defined divided earnings equals equity external f)." flotation follows, from in is issuing minus new of one percentage raised required retaining sell stock stock, the to words:
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