1. Which of the following relationships is true, regarding the costs of issuing the below securities?

A. Common stock>bonds>preferred stock.

B. Preferred stock>common stock>bonds.

C. Bonds>common stock>preferred stock.

D. Common stock>preferred stock>bonds.

2. The general rule for using the weighted average cost of capital (WACC) in capital budgeting decisions is accept all projects with ...........

A. rates of return greater than or equal to the WACC.

B. rates of return less than the WACC.

C. rates of return equal to or less than the WACC.

D. positive rates of return.