The cost of equity capital is all of the followingEXCEPT:

Select one:

a.The minimum rate that a firm should earn on the equity-financed part of an investment.

b.A return on the equity-financed portion of an investment that, at worst, leaves the market price of the stock unchanged.

c.By far the most difficult component cost to estimate.

d.Generally lower than the before-tax cost of debt

According to the Modigliani-Miller Theory (original proposition), all the following are trueEXCEPT:

Select one:

a.Cost of equity raises proportionally to the increase in debt-to-equity ratio.

b.Market value of a company does not depend on its capital structure.

c.Market value of a company depends on its capital structure.

d.Weighted average cost of capital remains the same as capital structure changes.