22 12. Which one of the following statements is true regarding both the percentage return and the dollar return on an equity investment? e A. B. The dollar return is less accurate than the percentage return because the dollar return includes dividend income while the percentage return does not. Without the size of an investment, the percentage return has more informational value than the dollar return. Dollar returns must either be zero or a negative value while percentage returns can be only negative or positive. C. 13. XYZ Inc. has a cost of common stock of 14%, a cost of preferred stock of 10% percent, an after-tax cost of debt of 4%, and a tax rate of 21%. Given this, which one of the following will reduce the firm's WACC, given that its PE ratio is equal to 24? A. B. C. Decreasing XYZ's beta Repurchasing shares of common stock Increasing the debt-equity ratio 14. An investor who invests $30,000 in the U.S. T-bills and $10,000 in the market portfolio will have a portfolio beta of A. B. C. 1.00 2/3 0.25 1 1 r