The cost of equity and the cost of debt.Your chief operating officer argues the following:

a. Our stock price is currently $60, and our dividend per share is $6. It means that it costs us 10 percent to use shareholders cash ($6 divided by $60).

b. From our balance sheet our liabilities are $80 million. From our income statement our interest expenses are $5 million. Thus, our cost of debt is 6.25 percent ($5 million divided by $80 million).Which statement is true and which false?