Which of the Following Statements Is CORRECT

question 63

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:

Sentinel-Controlled While Loop

A loop that continues execution until a special value, known as a sentinel value, is encountered which terminates the loop.

Statement Above

A reference to a piece of code or comment mentioned in the preceding lines in a document or code.

Continue Statement

A control statement in programming that causes the loop to immediately jump to the next iteration of the loop.

Entry Condition

An entry condition is a precondition that must be true before entering a loop or function to ensure proper execution.