Which One of the Following Statements Is Correct? Assume the Pre-Tax

question 42

Multiple Choice

Which one of the following statements is correct? Assume the pre-tax cost of debt is less than the cost of equity.

• A)A firm may change its capital structure if the government changes its tax policies.
• B)The cost of preferred stock decreases when the tax rate increases.
• C)A decrease in the systematic risk of a firm will increase the firm's cost of capital.
• D)A decrease in a firm's debt-equity ratio will decrease the firm's cost of capital.
• E)A decrease in the dividend growth rate increases the cost of equity.

Learn the significance and usage of tags in data management and web design.

Comprehend the formats and compatibility issues among various versions of software applications.

Recognize the utility of diagrams and templates in organizing and presenting information.

Grasp the fundamental concepts of database management systems.

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Definitions:

Downcutting

A process by which streams or rivers erode their beds, cutting downwards into the ground and often leading to valley deepening.

Ice Ages

Periods of extensive glacial coverage, where major portions of the Earth's surface are covered by ice sheets.

Delta

A landform at the mouth of a river, formed from the deposition of sediment carried by the river as it enters slower-moving or standing water.

Horizontal Layers

Layers of material, such as sedimentary rock, that are deposited in a flat or nearly flat arrangement.