Question 28

The Omega Company relies on preferred stock, bonds, and common stock for its long-term financing. Rank in ascending order (i.e., 1 = lowest, while 3 = highest) the likely after-tax component costs of the Omega Company's long-term financing.

Select one:

A. 1 = bonds; 2 = common stock; 3 = preferred stock.

B. 1 = bonds; 2 = preferred stock; 3 = common stock.

C. 1 = preferred stock; 2 = common stock; 3 = bonds.

D. 1 = common stock; 2 = preferred stock; 3 = bonds.