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Which of the following statements about the cost of capital is INCORRECT? Select one: a. If a company's tax rate increases, then, all else equal,
Which of the following statements about the cost of capital is INCORRECT? Select one: a. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will decrease. b. A company's composite WACC should be adjusted to reflect each project's risk. c. A company's cost of debt is the interest rate on new debt, not that on already outstanding debt. d. An increase in the risk-free rate is likely to increase the marginal costs of both debt and equity financing. O e. Both the cost of debt and equity financing will increase when a company merges with another firm whose earnings are counter-cyclical both to those of the first firm and those of the stock market
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