1. Why is the cost of common stock the highest of the three types of financing and the cost of debt the lowest? 2. What advantage of we get from using three different methods to calculate the

1.     Why is the cost of common stock the highest of the three types of financing and the cost of debt the lowest?

2.     What advantage of we get from using three different methods to calculate the cost of common stock financing?

3.     Why is the MCC important? What is it used for?

4.     If debt is the cheapest cost of financing, then issuing more debt should automatically lower the cost of capital. True or false? Explain.