Which of the Following Statements Is Most Correct

question 84

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 noncallable 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 stock price will increase the marginal cost of retained earnings.
• C) All else equal,an increase in a company's stock price will increase the marginal cost of issuing new common equity.
• D) Answers a and b are both correct.
• E) Answers b and c are both correct.

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Definitions:

Who's

The contraction of "who is" or "who has."

Lose

To be deprived of something or fail to win, such as losing an object, game, or opportunity.

Past

The past refers to the time period that has already happened, contrasting with the present and future.

Accept

To receive or agree to take something offered or to acknowledge the truth or validity of something.