Which of the Following Statements Is CORRECT

question 19

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Urine Drainage

The process of removing urine from the body or a medical device used for this purpose, often involving catheters.

Y Tubing

A type of medical tubing that branches into two limbs at one end, often used in transfusions or infusions.

Normal Saline

An isotonic solution of sodium chloride (0.9% NaCl) in water that matches the salt concentration of the body, commonly used for hydration and as a flush for medical catheters.

Citrate-phosphate-dextrose

A solution used in blood storage that acts to stabilize and preserve blood cells.