Question 3 1.5 points Save Answer Which of the following statements is CORRECT? The WACC is calculated using a before-tax cost for debt that is equal to the interest rate that must be paid on new debt, along with the after-tax costs for common stock and for preferred stock if it is used O CAPM model is not applicable for the cost of cquity estimation as it is based on the historical data on risk and return An increase in the risk-free rate is likely to reduce the marginal costs of both debt and equity The bond-yield-plus-risk-premium approach to estimating the cost of common equity involves adding a risk premium to the coupon rate on the company's own long-term bonds The WACC is a weighted average of the marginal costs of each capital component, with the weights based on the firm's target capital structure