For a Typical Firm with a Given Capital Structure,which of the Following

question 64

Multiple Choice

For a typical firm with a given capital structure,which of the following is correct? (Note: r_a = WACC,and all rates are after taxes. )

• A) r_d > r_e > r_s > r_a.
• B) r_s > r_e > r_d > r_a.
• C) r_a > r_e > r_s > r_d.
• D) r_e > r_s > r_a > r_d.
• E) None of the statements above is correct.

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