cost of initial offering
cost of new common equity
cost of preferred equity
cost of floatation
✅ The correct answer is B.
Cost of equity which is raised by reinvesting earnings internally must be higher than the cost of new common equity. The cost of equity is the return a company requires to decide if an investment meets capital return requirements.
Cost of equity which is raised by reinvesting earnings internally must be higher than the cost of new common equity. The cost of equity is the return a company requires to decide if an investment meets capital return requirements.