Ask Question
BusinessBusiness
29 December, 15:13

For capital budgeting and cost of capital purposes, the firm should always consider retained earnings as the first source of capital (i. e., use these funds first) because retained earnings have no cost to the firm. A. True. B. False.

+2
Answers (1)
  1. 29 December, 15:21
    0
    False

    Explanation:

    Even though the main reason why a corporation should hold retained earnings is to use them as a source of capital, it doesn't mean that retained earnings don't have any cost associated with them.

    The cost of holding retained earnings is the rate of return that shareholders require on the corporation's stock.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “For capital budgeting and cost of capital purposes, the firm should always consider retained earnings as the first source of capital (i. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
If government revenues in 2011 were $2.2 trillion and government outlays were $3.8 trillion, the federal: Choose one: A. debt increased $1.6 trillion. B. budget was balanced. C. debt decreased $1.6 trillion. D. debt was unaffected in that year. E.
Answers (1)
The market value of which of the items would be considered double (or multiple) counting in the calculation of GDP? A. a used skateboard you buy for your brother B. the commission paid to the seller of a previously owned collectors skateboard C.
Answers (1)
During the month of April, direct labor cost totaled $15,000 and direct labor cost was 30% of prime cost. If total manufacturing costs during April were $79,000, the manufacturing overhead was: Multiple Choice $35,000 $29,000 $50,000 $129,000
Answers (1)
An investment will pay $202,000 at the end of next year for an investment of $182,000 at the start of the year. If the market interest rate is 7.9% over the same period, should this investment be made
Answers (1)
Which best describes what a subsidy does? It keeps the price of domestic goods relatively low, It raises the price of imported goods, It limits the import of foreign goods, It eliminates all taxes on domestic goods,
Answers (2)
New Questions in Business
The last stage of the new-product development process is
Answers (1)
Divided Fantastic Frames sells its frames for $15 per unit. Variable costs total $6 per unit, and fixed costs total $90,000. If Fantastic Frames increases sales by
Answers (1)
A trade show is usually focused on what? a. an employer b. an industry c. a school d. a craft
Answers (1)
The Harrisburg Store has net working capital of $2,715, net fixed assets of $22,407, sales of $31,350, and current liabilities of $3,908. How many dollars' worth of sales are generated from every $1 in total assets
Answers (1)
Select all maintenance procedures that may be performed in an office. update software replace printer cartridges clean copy machines install virus-protection software print copies to be distributed at a meeting
Answers (1)
Home » Business » For capital budgeting and cost of capital purposes, the firm should always consider retained earnings as the first source of capital (i. e., use these funds first) because retained earnings have no cost to the firm. A. True. B. False.
Sign Up Forgot Password?