When a company earns a profit, the management has the option to retain the profit to reinvest in the company. When calculating the cost of capital, why is there a cost to assigned to retained earnings? Select one: The company must pay investment bankers a fee in order to retain earnings in a company. The retained earning belong to the shareholders and retaining the earnings creates an opportunity cost to shareholders. Bonds must be sold at the same time that earnings are retained and the bond sale has costs. New stock must be issued when earnings are retained to account for the increase in shareholder's equity. None of the other selections are correct because there is not a cost to retained earnings