Explain why: (a) Debt is usually considered the cheapest source of financing available to the firm. (b) The cost of preference shares is less than the cost of equity. (c) The cost of retained earnings...

Explain why:

(a) Debt is usually considered the cheapest source of financing available to the firm.

(b) The cost of preference shares is less than the cost of equity.

(c) The cost of retained earnings is less than the cost of new equity.

(d) The cost of equity and retained earnings is not zero.

(e) The cost of capital is dependent only on the cost of long-term funds.

(f) The cost of capital is a hurdle for new investment projects.

(g) The cost of capital is most appropriately measured on an after-tax basis.