Which of the Following Statements Is Most Correct

question 25

Multiple Choice

Which of the following statements is most correct?

• A) If a company's tax rate increases but the yield to maturity of its non-callable bonds remains the same, the company's marginal cost of debt capital used to calculate its weighted average cost of capital will fall.
• B) All else equal, an increase in a company's shares price will increase the marginal cost of retained earnings.
• C) All else equal, an increase in a company's share price will increase the marginal cost of issuing new ordinary equity.
• D) Answers a and b are both correct.
• E) Answers b and c are both correct.

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Definitions:

Vasomotor Center

Area within the medulla oblongata that regulates the diameter of blood vessels by way of the sympathetic nervous system.

Blood Colloid Osmotic Pressure

Pressure exerted by plasma proteins on capillary walls, which helps to maintain the water balance between blood and interstitial fluid.

Capillary

Small, thin-walled blood vessels that connect arterioles and venules, and facilitate the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and tissues.

Baroreceptors

Sensory nerve endings found in the walls of arteries and the heart that sense changes in blood pressure.