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Blue Inc has a debt equity ratio of 0 . 4 . The firm also has 4 0 % dividend payout ratio, a beta of
Blue Inc has a debt equity ratio of The firm also has dividend payout ratio, a beta of and a tax rate of Given this information, which of the following statements is correct? The aftertax cost of debt will be greater than the current yieldtomaturity on the firm's bonds. The firm's cost of preferred is most likely less than the firm's actual cost of debt. The firm's cost of equity is unaffected by a change in the firm's tax rate. The firm's weighted average cost of capital will remain constant as long as the capital structure remains constant.
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