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Which of the following statements is CORRECT? a. If a company's tax rate increases but the YTM on its noncallable bonds remains the same, the
Which of the following statements is CORRECT? a. If a company's tax rate increases but the YTM on its noncallable bonds remains the same, the after-tax cost of its debt will fall. b. All else equal, an increase in a company's stock price will increase its marginal cost of retained earnings, rs. c. All else equal, an increase in a company's stock price will increase its marginal cost of new common equity, re. d. Since the money is readily available, the after-tax cost of retained earnings is usually much lower than the after-tax cost of debt. e. When calculating the cost of preferred stock, a company needs to adjust for taxes, because preferred stock dividends are deductible by the paying
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