1.what might we expect to see in practice in the relative costs of different sources of capital?

2. how can a firm lower its cost of capital? what is the effect of the flotation costs associated with a new security issue on a firm's weighted average cost of capital?

3. What is the conversion value of a bond that is convertible into 25 shares of common stock that is currently selling $42.35?
A. $1,000.00
B. $1,058.75
C. $42.35
D. not enough information to tell
4. debt instruments that have a maturity between two and ten years are called __________.
A. bills
B. bonds
C. notes
D. none of the above
5. Conversion features allow companies to pay ______ rates interest.
A. higher
B. lower
C. the same
D. there is no relationship between interest rates and conversion.