The additional return offered by a more risky investment relative to a safer one is called the risk premium. the risky return. the risk-free rate. the insurance premium. What is the purpose of diversification? Increase the risk of your portfolio. Lower the overall risk of your portfolio. Maximize possible returns. None of the above. Everything else being equal a lower corporate tax rate... will increase the WACC of a firm with debt and equity in its capital structure will not affect the WACC of a firm with debt in its capital structure will decrease the WACC of a firm with some debt in its capital structure will decrease the WACC of a firm with only equity in its capital structure 10 East Coast Firm has a capital structure that is composed of $20 million of common stock and $30 million of debt. If Hast Coast is in the 40% marginal tax rate, what is its WACC if the yield to investors on Hast Coast's debt is 8.5% and the cost of East Coast's common stock is 13%