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Which of the following statements is most correct? The before-tax cost of preferred stock may be lower than the before-tax cost of debt, even though
Which of the following statements is most correct? The before-tax cost of preferred stock may be lower than the before-tax cost of debt, even though preferred stock is riskier than debt. If a company's stock price increases, this increases its cost of common stock. If the cost of equity capital increases, it must be due to an increase in the firm's beta. Statements a and b are correct. Answers a, b, and c are correct.
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