Answer (A) is correct . Because retained earnings is internally generated (that is, no issue costs are involved), its cost is simply the component cost of common stock, i.e., the next dividend divided by the market price ($7$100 = 7.0%).
Answer (B) is incorrect because This figure is the cost of new common stock.
Answer (C) is incorrect because This figure is the cost of new common stock after failing to subtract the discount.
Answer (D) is incorrect because Dividing the $7 dividend by the $100 market price of the stock produces a ratio of 7%, not 8.1%.
Answer (C) is incorrect because This figure is the cost of new common stock after failing to subtract the discount.
Answer (D) is incorrect because Dividing the $7 dividend by the $100 market price of the stock produces a ratio of 7%, not 8.1%.
The cost of funds from retained earnings for Williams, Inc., is
