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The aftertax cost of debt generally decreases when: I. A firm's bond rating increases. II. The market rate of interest decreases. III. Tax rates increase.

The aftertax cost of debt generally decreases when:

I. A firm's bond rating increases. II. The market rate of interest decreases. III. Tax rates increase. IV. Bond prices drop.

A.

I and III only

B.

II and III only

C.

I, II, and III only

D.

II, III, and IV only

E.

I, II, III, and IV

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