Which of the Following Statements Is Most Correct

question 20

Multiple Choice

Which of the following statements is most correct?

• A) Since debt financing raises the firm's financial risk, raising a company's debt ratio will always increase the company's WACC.
• B) Since debt financing is cheaper than equity financing, raising a company's debt ratio will always reduce the company's WACC.
• C) Increasing a company's debt ratio will typically reduce the marginal cost of both debt and equity financing; however, it still may raise the company's WACC.
• D) Statements a and c are correct.
• E) None of the statements above is correct.

---

Definitions:

Cerebellum

The cerebellum is a portion of the brain that plays a vital role in motor control, and it may also be involved in some cognitive functions like attention and language, as well as in regulating fear and pleasure responses.

Recall

the act of retrieving information or facts from one's memory.

Recall

The act of retrieving information or memories from the past, often without the help of explicit cues.

Implicit Memories

Memories that are not consciously recalled but influence behaviors and skills, such as procedural memories for tasks.