Which of the Following Statements About the Marginal Cost of Capital

question 13

Multiple Choice

Which of the following statements about the marginal cost of capital is correct? Assume everything else is equal. 

• A)An increase in the tax rate will decrease a firm's marginal cost of debt.
• B)An increase in a company's stock price will increase its marginal cost of debt.
• C)An increase in a company's stock price will increase its marginal cost of issuing new common equity.
• D)An increase in the total capital raised during a particular period will decrease a firm's marginal cost of debt.
• E)A decrease in the weighted cost of capital (WACC) will decrease a firm's marginal cost of retained earnings.