Question $34(1$ point$)$

Which of the following statements is correct?

A$)$ Because of tax effects, an increase in the risk$-$free rate will have a greater effect on the after$-$tax cost of debt than on the cost of common stock.

B$)$ When calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible for the corporation.

C$)$ When calculating the cost of preferred stock, companies must adjust for taxes, because dividends paid on preferred stock are deductible by the paying corporation.

D$)$ If a company's beta increases, this will increase the cost of equity, but never its WACC.