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1. As you know, debt is cheaper than equity. a. List two reasons why debt is cheaper. b. Does it mean using more debt is always better than less debt for cost minimization purpose? Why or why not? 2. For El Mundo corporation, the costs of various types of capital are as follows weight Cost of equity-15% Cost of preferred stock-12% Cost of debt-9% 40% 20% 40% Given the corporate tax rate of 40 %, what is the after-tax weighted average cost of capital of El Mundo? 3. Which of the following two industries has higher debt to equity ratio Industry A: Amazon.com, Facebook Industry B: Large retail stores 4. Cite an industry with a high dividend yield explain why