The Basis for Measuring the Cost of Capital Derived from Bonds

question 77

Multiple Choice

The basis for measuring the cost of capital derived from bonds and preferred stock,respectively,is the

• A)pre-tax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock.
• B)pre-tax rate of interest for bonds and stated annual dividend rate for preferred stock.
• C)after-tax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock.
• D)after-tax rate of interest for bonds and stated annual dividend rate for preferred stock.

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