If a company's target capital structure is 50% debt and 50% common equity, which would be a correct statement? Question 3 options:

a) The cost of reinvested earnings typically exceeds the cost of new common stock.

b) The interest rate used to calculate the WACC is the average after-tax cost of all the company's outstanding debt as shown on its balance sheet.

c) The WACC is calculated on a before-tax basis.

d) The cost of equity is always equal to or greater than the cost of debt.