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Author Question: Which of the following statements is correct? (Read 12 times)

kaitlynndavis

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on: Aug 7, 2023
Which of the following statements is correct?

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The cost of retained earnings is the rate of return shareholders require on a firm’s common stock.


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The cost of new equity (re) could possibly be lower than the cost of retained earnings (rs) if the market risk premium, risk-free rate, and the company’s beta all decline by a sufficiently large amount.


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We should use historical measures of the component costs from prior financings when estimating a company’s WACC for capital budgeting purposes.


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In the WACC calculation, we must adjust the cost of preferred stock (the market yield) to reflect the fact that 70% of the dividends received by corporate investors are excluded from their taxable income.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by kaitlynndavis on Aug 7, 2023

kugyo01

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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kaitlynndavis

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Reply 2 on: Aug 7, 2023
Wow, this really help

nathang24

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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