Which one of the following best explains why R_D is multiplied by (1-T_c) when computing the Weighted Average Cost of Capital?

Group of answer choices

to account for the cost of preferred stock

interest expense on debt is a non-cash expense and must be added back to Net Income

Rd is generally lower than Re for a given firm

dividends on common stock are optional

the tax deductibility of interest expense on debt reduces the overall cost of debt