Question
If the corporate tax rate is 35% and there is no default risk, which of the following is NOT true? A. All of the statements
If the corporate tax rate is 35% and there is no default risk, which of the following is NOT true?
A. All of the statements are true.
B. Cost of equity does not depend on capital structure.
C. Cost of riskless debt does not depend on capital structure.
D. WACC declines as financial leverage increases.
E. Cost of equity increases with financial leverage.
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Problems In Portfolio Theory And The Fundamentals Of Financial Decision Making
Authors: Leonard C Maclean, William T Ziemba
1st Edition
9814749931, 978-9814749930
