What advantage do retained earnings hold over other sources of equity capital?

1. Retained earnings are profits that have been reinvested in the firm. 2. Their big advantage over other sources of equity capital is that they do not incur underwriting costs. 3. Selling new shares does incur those costs, since investment bankers must be paid to bring an issue to market. 4. Financial managers balance dividends against retained earnings to maximize the value of the firm. 5. High-growth companies, especially in technology, finance much of their growth this way and pay little or no dividend. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.5 Equity Financing_