Cost of new common stock
Cost of new common stock, re, is the cost of external equity; based on the cost of retained earnings, but increased for flotation costs necessary to issue new common stock.
Definitions
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Cost of new common stock, re. The cost of external equity; based on the cost of retained earnings, but increased for flotation costs necessary to issue new common stock.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
