true and false

6. The cost of preferred stock is typically lower than the cost of long-term debt (i.e., bonds) because

the preferred stock dividend payments are tax deductible.

______ 7. A firm can retain more of its earnings if it can convince its stockholders that it will earn at least

their required return on the reinvested funds.

______ 8. The cost of preferred stock is generally higher than both the cost of debt and the cost of

retained earnings.

______ 9. The cost of new common stock is normally greater than any other long-term financing cost.

______ 10. The