For a typical corporation, which of the following capital ...

[kwoodring]

For a typical corporation, which of the following capital structures will result in the lowest
  weighted average cost of capital?
 
  A) 50 debt, 10 preferred stock, 40 common equity
  B) 60 debt, 15 preferred stock, 25 common equity
  C) 40 debt, 20 preferred stock, 40 common equity
  D) 60 debt, 10 preferred stock, 30 common equity

Question 2

If market interest rates decline,
 
  A) long-term bonds will decline in value more than short-term bonds.
  B) short-term bonds will rise in value more than long-term bonds.
  C) short-term bonds will decline in value more than long-term bonds.
  D) long-term bonds will rise in value more than short-term bonds.

[gabrielle_lawrence]

Answer to Question 1

B

Answer to Question 2

D