Homework Help: accounting

Posted by james on Thursday, August 5, 2010 at 12:27am.

The overall (weighted average) cost of capital is composed of a weighted average of :
a)The cost of common equity and the cost of debt
b)The cost of common equity and the cost of preferred stock
c)The cost of preferred stock and the cost of debt
d)The cost of common equity, the cost of preferred stock, and the cost of debt

Question No: 2
Which of the following is a characteristic of preferred stock?
a)These stocks have not stated liquidating value
b)Dividends on these stocks can be cumulative
c)These stocks hold credit ratings quite different from bonds
d)These stocks have not any kind of priority over common stocks

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