What is meant by the cost of capital? Why do we want to know about this? How does the cost of capital vary in the short term, medium term and long term? Explain the differences in your own words and explain why each term is important for finance,
1. The cost of long term debt, net proceeds, flotation costs - define and explain each one, provide an example of each one.
2. The cost of retained earnings, the cost of preferred stock and the cost of new issue of common stock - define and explain each one. Provide a real world example of each one.