Black River Tours has a capital structure of 55 percent common stock, 5 percent preferred stock, and 40percent debt. The firm has a 30 percent dividend payout ratio, a beta of 1.21, and a tax rate of 34 percent. Given this, which one of the following statements is correct?

a. The after tax cost of debt will be greater than the current yield-to-maturity on the firm's outstanding bonds.

b. The firm's cost of preferred is most likely less than the firm's actual cost of debt.

c. The firm's cost of equity is unaffected by a change in the firm's tax rate.

d. The cost of equity can only be estimated using the capital asset pricing model.

e. The firm's weighted average cost of capital will remain constant as long as the firms capital structure remains constant.