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A firm has determined its cost of each source of capital and optimal capital structure, which is composed of the following sources and current market

A firm has determined its cost of each source of capital and optimal capital structure, which is composed of the following sources and current market value proportions: Capital MKT Proportion After-Tax Cost Long-Term Debt 45% 5% Preferred stock 10% 14% Common Stock equity 45% 22% Other things remaining constant, if the firm were to shift toward a capital structure with ________ the weighted average cost of capital will be higher.

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