tion 34 A firm is paying 4% interest rate on its outstanding debt capital. All else constant, the higher the firm's tax rate: et s out of 1 ag on Select one: O A. The higher its after-tax cost of debt OB. The lower its after-tax cost of debt OC. The after-tax cost of debt remains unchanged OD. The answer cannot be determined with the information provided on 35 et ered A firm's debt-to-equity ratio varies at times because is a firm: 1. Will want to take advantage of timing its fund raising in order to minimize costs over the long run II. Is allowed some leeway in its debt-to-equity ratio before being penalized by the market with a higher cost of capital III. Will try to sell common stock when prices are high and bonds when interest rates are s out of 1 ag tion low Select one: OA. I only B. I and Il only OC. I and III only OD. 1. ll, and