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:

Naval Blockade

A naval blockade is a military strategy that involves deploying naval vessels to prevent goods, military reinforcements, and other resources from reaching or leaving an enemy's shores.

Southern Ports

Maritime gateways located in the southern region of the United States, crucial for trade and transportation.

Northern Naval

Referring ambiguously, possibly relating to the naval forces or operations based in the northern part of a country or pertaining specifically to the Union Navy during the American Civil War.

Battle of Shiloh

A major battle in the American Civil War, fought in 1862 in Tennessee, marked by heavy casualties on both Union and Confederate sides.