Question: 1.How do companies decide on their capital structures? Do many publicly-traded companies have preferred stocks in their capital structures? 2.Explain what is meant by business

1.How do companies decide on their capital structures? Do many publicly-traded companies have preferred stocks in their capital structures?

2.Explain what is meant by business and financial risk. Suppose firm A has greater business risk than firm B. Is it true that firm A also has a higher cost of capital? explain.

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