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Which of the following statements is most likely correct? I. The higher the cost of equity and debt, the higher the cost of capital, with

Which of the following statements is most likely correct?

I. The higher the cost of equity and debt, the higher the cost of capital, with all else constant.

II. The higher the cost of capital, the higher the value of the company, with all else constant.

III. A higher corporate tax rate will incentivize firms to issue more debt than equity to reduce the cost of capital, with all else constant.

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