Preferred stock generally does not pay any dividend

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Reference no: EM131947225

1. (TRUE or FALSE?) James lent money to The Corner Store by purchasing bonds issued by the store, and therefore the rate of return that he and the other lenders require is referred to as the cost of debt.

2. (TRUE or FALSE?) Preferred stock generally does not pay any dividend.

3. (TRUE or FALSE?) The weighted average cost of capital, ka or WACC, is the overall average cost of funds and considers only the cost of debt because it is the cheapest source in the firm’s capital structure.

Reference no: EM131947225

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