Your boss has asked you to calculate the cost of preferred stock. You're most likely to compute the cost the same as you would the: Pretax cost of debt. Rate of return on an annuity. Cost of an irregular growth common stock. Aftertax cost of debt. Rate of return on a perpetuity.

Gennifers Hair and Nail Products is a multi division firm, and each division is in a separate line of business. The company always uses its overall WACC as the discount rate for evaluating new projects. Given this, a division within the firm will tend to:

Prefer higher risk projects over lower risk projects.

Avoid risky projects so it can receive more project funding.

Have an equal probability with all the other divisions of receiving funding.

Receive less project funding if its line of business is riskier than that of the other divisions.

Become less risky over time based on the projects that are accepted.