The Gearing Company has an after-tax cost of debt capital of 4%, a cost of preferred stock of 8%, a cost of equity capital of 10%, and a weighted average cost of capital of 7%. Gearing intends to maintain its current capital structure as it raises additional capital. In making its capital-budgeting decisions for the average-risk project, the relevant cost of capital is:

A drawback of service blueprints is that they cannot give managers the opportunity to identify potential fail points in the process where there is a significant risk of things going wrong and diminishing service quality

Indicate whether the statement is true or false

Preferred stock differs from common stock in that

A) preferred stock dividends are fixed. B) preferred stock investors have a higher required return than common stock investors. C) preferred stock usually has a maturity date. D) common stock investors have a required return and preferred stock investors do not.