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:

Homo Sapiens

Species name of modern humans.

195,000 Years

An estimate of the time period since the emergence of anatomically modern humans.

25,000 Years

An approximate time period which can reference significant dates in geologic, archaeological, or historical contexts.

Vision

Detection of light in a way that provides a mental image of objects in the environment.