Cost of retained earnings is equal to _______.
A. Cost of equity
B. Cost of debt
C. Cost of bank loan
D. Cost of term loans
Answer: Option A
Solution(By Examveda Team)
Cost of retained earnings is equal to Cost of equity. The cost of retained earnings is the earnings foregone by the shareholders. In other words, the opportunity cost of retained earnings may be taken as the cost of retained earnings.Join The Discussion
Comments ( 2 )
Investment is the _______________.
A. net additions made to the nation’s capital stocks
B. person’s commitment to buy a flat or house
C. employment of funds on assets to earn returns
D. employment of funds on goods and services that are used in production process
Financial Management is mainly concerned with ______________.
A. All aspects of acquiring and utilizing financial resources for firms activities
B. Arrangement of funds
C. Efficient Management of every business
D. Profit maximization
The primary goal of the financial management is ____________.
A. to maximize the return
B. to minimize the risk
C. to maximize the wealth of owners
D. to maximize profit
In his traditional role the finance manager is responsible for ___________.
A. proper utilisation of funds
B. arrangement of financial resources
C. acquiring capital assets of the organization
D. efficient management of capital
Cost of retained earning is lesser than equity because of tax and brokerage adjustments.
cost of retained earnings is lesser than cost of equity
ie Kr = Ke(1-t)(1-b)