The cost of capital for retained earnings is a. market driven. b. calculated using the Geurts Valuation Model...

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The cost of capital for retained earnings is a. market driven. b. calculated using the Geurts Valuation Model...

The cost of capital for retained earnings is

a. market driven.

b. calculated using the Geurts Valuation Model (= GVM).

c. affected by the tax rate of the firm.
d. subject to flotation costs.

e. difficult to estimate.

d. 12.25%

e. 12.55%

business finance

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Answer 1

Answer #1

Option A is correct

Option B is incorrect because it is GGM Gordon Growth Model

Option C is incorrect because cost of retained earnings is not affected by tax rate

Option D is incorrect because cost od retained earnings is not subject to flotation costs

Option E is incorrect because it can be easily estimated

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Answer 2

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The cost of capital for retained earnings is a. market driven. b. calculated using the Geurts Valuation Model...

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