Question 7 (1 point)

Which of the following statements is correct?

Question 7 options:

	All else equal, an increase in a companys stock price will increase its marginal cost of new common equity, re.
	If a companys tax rate increases but the YTM of its noncallable bonds remains the same, the after-tax cost of its debt will fall.
	Since the money is readily available, the after-tax cost of retained earnings is usually much lower than the after-tax cost of debt.
	All else equal, an increase in a companys stock price will increase its marginal cost of retained earnings, rs.

Save