Which of the following statements is FALSE?
A) Issuance costs increase the WACC.
B) External equity is less expensive than retained earnings.
C) A project that can be financed with internal funds will be less costly than the same project if it were financed with external funds.
D) Issuance costs should be treated as cash outflows in NPV analysis.

Question

Quizplus · Accepted Answer

Retained earnings are less expensive than external equity because there are no issuance costs associated with them.

Which of the Following Statements Is FALSE