Question
Now order the following based on the typical or most common relationship Where (1) is the lowest cost and (4) is the highest cost -
Now order the following based on the typical or most common relationship
Where (1) is the lowest cost and (4) is the highest cost
- 1. 2. 3. 4.
cost of common equity from new issuance (this is the most expensive)
- 1. 2. 3. 4.
after-tax cost of debt (see for example stocks vs bonds currently: (picture link) the yellow line is generally below the blue line )
- 1. 2. 3. 4.
cost of preferred stock (this is always higher than the after-tax cost of debt)
- 1. 2. 3. 4.
cost of common equity from retained earnings (this has more risk than preferred stock)
and please help with this one! I look forward to leaving a positive feedback!
Order the following based generally on their level of risk (with one as the lowest and 3 as the highest)
- 1. 2. 3.
Corporate Preferred Stock
- 1. 2. 3.
Corporate Common Stock
- 1. 2. 3.
Corporate Debt
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