The cost of preferred stock is greater than the cost of debt primarily as the result of the difference in tax treatment of dividends and interest.
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Q8: The cost of debt is less than
Q9: Because interest is a tax-deductible expense, the
Q10: The cost of debt exceeds the cost
Q11: Retained earnings are more expensive than issuing
Q12: If a firm's optimal capital structure is
Q14: If management substitutes new common stock for
Q15: The cost of retained earnings tends to
Q16: A firm will prefer to issue preferred
Q17: The optimal capital structure minimizes the weighted
Q18: A firm may initially increase its use
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