I'm definitely not quire sure on the following questions.

If the cost of new common stock is greater than the cost of retained earnings because: a) of the flotation costs; b) it increases the market price of the stock, c) it decreases the earnings per share or is it d) dividends are increased. I'm assuming "c" it decreases the earnings per share?

Similarly, then the certainty equivalent factors used in capital budgeting analysis are equal to the ____ divided by ____. I'm gearing more towards "b"?

a) risky return; certain return

b) certain return; beta

c) certain return; risky return

d) beta, risky return