Which of the following is false? An increase in the cost of common share may be due to an increase in share’s beta The cost of common shares can be classified as a cost of retained earnings or cost of issuance of new shares. Floatation cost affects the cost of equity from newly issued stocks and this impacts the weighted average cost of capital The floatation cost which is deducted against the stock issue price should always be considered in all scenarios of computing the cost of ordinary stock.
Which of the following is false? An increase in the cost of common share may be due to an increase in share’s beta The cost of common shares can be classified as a cost of retained earnings or cost of issuance of new shares. Floatation cost affects the cost of equity from newly issued stocks and this impacts the weighted average cost of capital The floatation cost which is deducted against the stock issue price should always be considered in all scenarios of computing the cost of ordinary stock.
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 8QTD
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Which of the following is false?
An increase in the cost of common share may be due to an increase in share’s beta
The cost of common shares can be classified as a cost of retained earnings or cost of issuance of new shares.
Floatation cost affects the cost of equity from newly issued stocks and this impacts the weighted average cost of capital
The floatation cost which is deducted against the stock issue price should always be considered in all scenarios of computing the cost of ordinary stock.
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