Aroma Chemicals has a debttoequity ratio of 0.7. The companys weighted average cost of capital (WACC) is 8%, while its cost of equity is 12%. Given a marginal tax rate of 30%, the companys aftertax cost of debt is closest to:

Group of answer choices

2.29%

3.27%

4.35%

What is the primary thesis of ModiglianiMiller propositions regarding companies changing their capital structure and the value of their firms?

Group of answer choices

It does not change value.

It adds value.

It subtracts value.