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In a changing interest rate environment, the cost of new debt Multiple Choice is equal to the cost of borrowing. increases when taxes are considered.

In a changing interest rate environment, the cost of new debt
Multiple Choice
is equal to the cost of borrowing.
increases when taxes are considered.
is assumed to be zero for a levered firm.
is equal to the embedded cost of old debt.
generally exceeds the cost of equity on a pretax basis.

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