Question: Question 2: Explain why new common stock that is raised externally has a higher percentage cost than equity that is raised internally as retained earnings.

Question 2: Explain why new common stock that is raised externally has a higher percentage cost than equity that is raised internally as retained earnings.

Question 3:

1. What are the three types of risk that are relevant in capital budgeting?

2. How is each of these risk types measured, and how do they relate to one another?

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