Why is the cost of retained earnings less than cost of common stock?
![]() |
Why is the cost of retained earnings less than cost of common stock?
Cost of Common Stock is higher due to floatation cost and other incidental cost in issuing new shares of common Stock. Retained earnings is lower because retained earnings is for internal financing porpuses and it disregards the other cost such as floatation cost and the like.
| All times are GMT -7. The time now is 06:16 PM. |