Which of the Following Statements Is CORRECT

question 58

Multiple Choice

Which of the following statements is CORRECT?

• A) A change in a company's target capital structure cannot affect its WACC.
• B) WACC calculations should be based on the before-tax costs of all the individual capital components.
• C) Flotation costs associated with issuing new common stock normally reduce the WACC.
• D) If a company's tax rate increases,then,all else equal,its weighted average cost of capital will decline.
• E) An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing.

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Definitions:

Anima

In Jungian psychology, the feminine inner personality that is present in the unconscious of the male.

Persona

In Jung’s version of psychoanalysis, the social mask one wears in public dealings.

Animus

In Jungian psychology, the masculine part of a woman's personality or the unconscious masculine side of the female.

Inferiority

A feeling of being less important, skilled, or worthwhile compared to others, often leading to lower self-esteem.