General Studies · Cost of Capital
The Cost of Retained Earnings (Kre) is generally considered to be:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Slightly lower than the cost of new equity due to the absence of flotation costs✓
- 2Equal to the cost of new equity issued publicly
- 3Equal to the after-tax cost of debt
- 4Zero, as the company does not incur any fresh cash outflow
Correct answer
Slightly lower than the cost of new equity due to the absence of flotation costs
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