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The Cost of Debt & Preferred Stock

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which typically have the lowest costs associated with it?

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1. Suzie wants to raise capital to buy a new piece of equipment that will generate increased revenue. Suzie is the sole owner of the company and she likes it that way. How can she raise capital for the equipment?

2. How do preferred stocks differ from common stocks?

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About This Quiz & Worksheet

The simple, interactive questions on this quiz delve into definitions and concepts about cost of debt and preferred stock as an assessment of your knowledge of this topic.

Quiz & Worksheet Goals

The multiple-choice questions on this quiz will ask you about:

  • The cost of loans, bonds, preferred and common stock
  • Dividend guarantees
  • Specific characteristics of preferred stock

Skills Practiced

You will test your skills such as:

  • Interpreting information - verify that you can review information regarding investment vehicles and interpret it correctly
  • Information recall - access the knowledge you've gained regarding creditors and financing with debt
  • Knowledge application - use your knowledge to identify differences in costs associated with bonds versus loans

Additional Learning

Find out more by reviewing the lesson called The Cost of Debt & Preferred Stock. From this lesson, you will get information on:

  • A firm's capital structure
  • The fee for loaning a company money
  • The role of the SEC
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