The Cost of Preferred Stock Is Computed the Same as The

question 48

Multiple Choice

The cost of preferred stock is computed the same as the:

• A)pre-tax cost of debt.
• B)return on an annuity.
• C)aftertax cost of debt.
• D)return on a perpetuity.
• E)cost of an irregular growth common stock.

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Definitions:

Efficient

In economic terms, relates to an allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

Opportunity Cost

Opportunity cost represents the value of the best alternative forgone when a decision is made to choose one option over another.

Parking Permit

A document or label allowing a vehicle to be parked in a designated area or facility.

Opportunity Cost

The expense associated with not choosing the second-best option when a decision or choice is made.