A Firm Has a Cost of Equity of 13 Per

question 48

Multiple Choice

A firm has a cost of equity of 13 per cent,a cost of preferred of 11 per cent,and an after-tax cost of debt of 6 per cent.Given this,which one of the following will increase the firm's weighted average cost of capital?

• A)redeeming shares of common stock
• B)increasing the firm's beta
• C)increasing the firm's tax rate
• D)increasing the debt-equity ratio
• E)issuing new bonds at par

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Definitions:

Voice Response

Technology or systems that interpret and react to spoken commands, often used in telecommunications and computing.

Transumer

A consumer who values experiences over owning physical products and often engages in the sharing economy.

Transumer

A consumer who prioritizes experiences over owning possessions, often engaging in the sharing economy.

Tangible Goods

Physical items that can be seen, touched, and possessed, such as books, clothing, or cars.