ON THE COST OF NEW ISSUES OF COMMON STOCK: AN AMENDMENT TO THE CONSTANT GROWTH MODEL
指出，由于发行成本的存在，通常认为新股发行比留存收益成本更高，但作者证明新股发行成本实际上可能更低，这对企业扩张决策有重要影响。
ABSTRACT Expansion decisions by corporate managements are importantly influenced by their perceptions of the firm's cost of capital and especially the cost of common equity. Their decision making is then influenced by the common perception that new issues of common stock are more costly than retained earnings because of the flotation costs inherent in new issues. Thus a rate of expansion that requires new issues is downgraded in decision making. In this paper the authors show that in actuality new issues of common equity may be less costly than retained earnings. Thus different decision‐making implications are clearly involved.