The net new equity raised by a ﬁrm during a given year can be calculated as:
A) New equity sales minus equity repurchases plus retained earnings.
B) New equity sales minus equity repurchases plus retained earnings minus dividends paid.
C) New equity sales minus equity repurchases.
D) New equity sales plus retained earnings.
E) New equity sales minus dividends paid.

Question

Quizplus · Accepted Answer

The net new equity raised by a firm is calculated as the new equity sales minus equity repurchases. Retained earnings and dividends paid are not part of this calculation as they pertain to internal financing and distribution of profits, not new equity raised.

The Net New Equity Raised by a ﬁRm During a Given