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3. _____ Which of the following statements is CORRECT? a. Funds acquired by the firm through retaining earnings have no cost because there are no
3. _____ Which of the following statements is CORRECT?
a. Funds acquired by the firm through retaining earnings have no cost because there are no dividend or interest payments associated with them.
b. The firms cost of external equity raised by issuing new stock is the same as the required rate of return on the firms retained earnings.
c. A firms cost of equity is highly dependent upon the risk level of the firm.
d. A firms cost of equity is inversely related to changes in the firms tax rate.
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