. A firm has issued preferred stock at its $75 per share par value. The stock will pay a S10 annual dividend. The cost of issuing and selling the stock was S5 per share. The cost of the preferred stock is 7.2 pencent 10 percent. 12 4 percent 14.3 percent 3.00000 points QUESTION 2 1. Combining two assets having perfectly negatively correlated returns will result in the creation of a portfolio with an overall risk that increases to a level above that of either asset remains unchanpod decrcases to a level below that of cither asset. stabilizes to a level between the asset with the high? fisknd assesith lower 3.00000 points QUESTION 3 1. The reason a negatively correlated asset might be added to a portfolio is because we want to: increase the poetfolio's retum even out the portfolios standard deviation increase the poetfolio's standard deviation lower the potfolio's standand deviation 3.00000 points QUESTION 4 1. When the net present value is zero, the internal rate of return isS the cost of capital. greater tha greater than or equal to less than equal to 3.00000 points QUESTION 5 1. Why is debt cheaper than Retained Earnings, New Stock or preferred stock? fixed interest payments its position in the prionity of claims on assets and camings in the evont of lquidaton the tax dedactibility of interest payments the secured mature of a debe ebligation