Which of the following statement is correct? Because the interest paid on bonds or bank loans is not a tax-deductible expense for a business, a firm's AT kd is more than the required rate of return of the suppliers of debt capital. Increasing the firm's beta will decrease the firm's weighted average cost of capital. All the answers are incorrect. The cost of preferred stock is negatively affected by the issuer's tax rate. There is no tax adjustment in the cost of preferred stock calculation because unlike interest payments on debt, firms may not deduct preferred stock dividends on their tax returns