If XYZ, Inc.s target capital structure is 50% debt and 50% common equity, which would be a correct statement?

Question 23 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 cost of equity is always equal to or greater than the cost of debt.

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