In computing the cost of retained earnings, the net proceeds represents the amount of money retained net of any underpricing and/or flotation costs.

Name: In computing the cost of retained earnings, the net proceeds represents the amount of money retained net of any underpricing and/or flotation costs.
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Question

Quizplus · Accepted Answer

The net proceeds represent the amount of money raised in the issuance of new stock, not retained earnings. Retained earnings are the profits a company keeps and reinvests in the business.

In Computing the Cost of Retained Earnings, the Net Proceeds