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

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


               Table 1 (Use this for questions 32-36)
Average selling price per unit      $16.00
Variable cost per unit              $11.00
Units sold                         200,000
Fixed costs                      $800,000
Interest expense                $ 50,000

 

Solution