Which of the following statements about the cost of capital is most correct? ...
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Finance
Which of the following statements about the cost of capital is most correct?
| A | Equity generated by retained earnings is costless. |
| B | For-profit firms should always retain the full amount of net income and reinvest it in the business. |
| C | For-profit firms should always distribute the full amount of net income as dividends. |
| D | For-profit firms should distribute net income through dividends if they cannot earn as much as stockholders could in similar risk investments. |
| E | None of the statements above is correct. |
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