In Calculating the Cost of Capital for an Average Firm,which

question 127

Multiple Choice

In calculating the cost of capital for an average firm,which of the following statements is true?

• A)The cost of a firm's bonds is greater than the cost of its common stock.
• B)The cost of a firm's preferred stock is greater than the cost of its common stock.
• C)The cost of a firm's retained earnings is less than the cost of its bonds.
• D)The cost of a firm's common stock is greater than the cost of its bonds.

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