Multiple Choice
According to the graph of WACC for Union Pacific, the following is (are) true:
I. cost of equity is an increasing function of the debt-equity ratio.
II. cost of debt is an increasing function of the debt-equity ratio.
III. weighted average cost of capital (WACC) is a decreasing function of the debt-equity ratio.
A) I only
B) I and II only
C) III only
D) I, II and III
Correct Answer:
Verified
Correct Answer:
Verified
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