1. The after tax cost of preferred stock to the issuing corporation

1. Is the same as the before tax cost
2. Is usually lower than the cost of debt
3. Is dependent on the firms tax bracket
4. None of the options are correct.

2. Normally, the cost of capital should be ____?

1. Less than the internal rate of return
2. Corresponding to the internal rate of return
3. More than the internal rate of return.
4. Equal to the internal rate of return.