All of the following are correct except:

a$)$

Unlike debt and preferred stock, cash flows from common equity are not

fixed or known beforehand and their risk is harder to evaluate.

b$)$

Firms have three sources of common equity, retained earnings, treasury

stock, and new stock issues, and thus two costs of common equity.

c$)$

From the shareholders' perspective, the opportunity cost of retained earnings

is the return the shareholders could earn by investing the funds in assets

whose risk is similar to that of the firm.

d$)$

If the firm cannot invest its retained earnings to achieve a sufficient risk$-$

adjusted return, shareholders would be better off receiving $100$ percent of

its net income as dividends.