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The cost of external equity is greater than the cost of retained earnings because a. floatation costs on new equity b. capital gains tax on new equity c. interest expense d. risk premium?
Siscorley
The cost of external equity is higher because the floatation costs on new equity.
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∙ 12y ago
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Is retained earnings a liability?
NO, the retained earnings would be in the equity part of the equation.
What is the normal balance of retained earnings?
normal balance of retained earnings: credit.
What is retained earnings deficit?
In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation takes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings.
Are dividends paid out of retained earnings?
Yes, the amount of x dividends paid will reduce retained earnings by x.
How do you calculate capital stock when you have assets liabilities and retained earnings?
Beg. Retained earnings + NI - Div Paid = Ending RE
Is it possible to withdraw from a retained earnings account to finance company investments like capital assets?
Prime reason for maintenance of Retained earnings is to support business in times of problems, so retained earnings are mostly used by companies to purchase capital assets and even if there is no external source of finance available in that case retained earnings are also used
Is unappropriated retained earnings credit?
Yes, since this account (Retained Earnings) is a credit account and an uppropriate retained earnings account is simply a non-restricted account which is Retained Earnings !!! Even the restricted/ appropriate retained earnings are credited.
Which financial statement summarizes the changes in retained earnings?
Stetement of retained earnings summarizes the changes occured in retained earnings from opening balance to closing balance.
What are the reasons for not using retained earnings when starting a new business?
A new business has no retained earnings. Retained earnings are prior years earnings that have not been distributed to the shareholders... if it is a brand new business there is no possible way to have retained earnings at inception date.
Formulla for retained earnings?
retained earnings=profit after tax- dividend distribution
Is retained earnings a liability?
NO, the retained earnings would be in the equity part of the equation.
What is the normal balance of retained earnings?
normal balance of retained earnings: credit.
Is retained earnings a current liability?
Retained Earnings is a Non-Current Liability
Are dividends paid out of the current year's profits or from retained earnings?
From retained earnings.
How is retained earnings calculated?
1. If dividend paid: Retained Earnings = Net profit - dividend if dividend not paid: Retained earnings = Net profit
What is a closed revenue and expense account to retained earnings called?
When you close the accounts, it totals into retained earnings, so in turn, it is essentially retained earnings.
Is retained earnings an asset?
No, retained earnings comes after Net Income on the Income Statement. The retained earnings is less than the Net Income if a dividend is paid out.
