Which of the Following Statements Is Correct

question 81

Multiple Choice

Which of the following statements is correct?

• A)All else being equal, an increase in a company's stock price will increase its marginal cost of retained earnings, r_s.
• B)All else being equal, an increase in a company's stock price will increase its marginal cost of new common equity, r_e.
• C)Since the money is readily available, the after-tax cost of retained earnings is usually much lower than the after-tax cost of debt.
• D)If a company's tax rate increases but the YTM of its noncallable bonds remains the same, the after-tax cost of its debt will fall.

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Definitions:

Conjugation

The overlapping of p-orbitals in adjacent atoms creating a system of connected π-electrons across the molecule, leading to stabilization and coloration in compounds.

Absorption Frequency

The specific frequency at which a substance absorbs electromagnetic radiation, often used in spectroscopy to identify materials.

C=C

A carbon-carbon double bond, representing a type of covalent bond between two carbon atoms, involved in unsaturated organic compounds.

Terminal C-H Stretch

A term used to describe the absorption feature in infrared spectroscopy corresponding to the vibration of C-H bonds at the end of carbon chains.