Which of the following statement is correct? O The proportions of debt and equity used to determine the weighted average cost of capital for a firm is based on the accounting (book) values of debt, common stock, and preferred stock. All the answers are incorrect. O The constant growth version of the dividend growth model assumes that the company's dividends grow at an increasing rate indefinitely. O Unlike interest expense on debt, preferred stock dividends are viewed as a return to equity, and therefore there is no tax adjustment. Firms raise debt capital from stock holders or preferred stock holders. Question 2 Which of the following statement is incorrect? 4 1 pts Flotation costs make the cost of using funds supplied by new stockholders slightly higher than using retained earnings supplied by the existing stockholders. Most of the answers are correct. The constant growth version of the dividend growth model assumes that the company's dividends grow at the same rate indefinitely. O The cost of debt is always less than the cost of equity for a given firm. The weight referred to in weighted average cost of capit refers to the portion of the total capital raised by the debt only