13. A firm's cost of debt: A. increases as the tax rate increases. B. increases when the firm's bond rating increases. C. is the interest rate the firm must pay on new debt. E. is inversely related to market rates.

15. If you are using the perpetuity formula, you are computing the cost of: A. preferred stock. B. debt on a pre-tax basis. C. debt on an after-tax basis. D. either common or preferred stock.

12. Which one of the following correctly represents a firm's after-tax cost of debt? A. current yield x (1 - tax rate) B. current yield x tax rate C. coupon rate x (1 - tax rate) D. yield to maturity x (1 - tax rate)