1. The cost of capital represents the weighted average cost of all sources of long-term financing to the firm, is normally the discount rate to use in analyzing an investment, is based on the valuation techniques from the previous chapter and is applied to bonds, preferred stock and common stock. What does this mean to you, in plain language? (2 paragraph well written clear explanation)
2. How do we measure the cost of preferred stock and cost of common stock equity of a firm? (1 concise paragraph 6 sentences minimum)