TeachMeFinance.com - explain Cost of retained earnings
Cost of retained earnings The term 'Cost of retained earnings' as it applies to the area of energy can be defined as ' The residual of an entity's earnings over expenditures, including taxes and dividends, that are reinvested in its business. The cost of these funds is always lower than the cost of new equity capital, due to taxes and transactions costs. Therefore, the cost of retained earnings is the yield that retained earnings accrue upon reinvestment'.
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