Which of the following statements is CORRECT? a. Since debt capital can cause a company to go bankrupt but equity capital cannot, debt is o. riskier than equity, and thus the after-tax cost of debt is always greater than the cost of equity. company does in fact pay taxes. risk, then the company is likely to reject some safe projects that it actually should accept and b. The tax-adjusted cost of debt is always greater than the interest rate on debt, provided the to accept some risky projects that it should reject d. Because no flotation costs are required to obtain capital as retained earnings, the cost of retained earnings is generally lower than the after-tax cost of debt. e. Higher flotation costs tend to reduce the cost of equity capital