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.