Multiple Choice
Based on M&M Proposition I with taxes, the weighted average cost of capital:
A) is equal to the aftertax cost of debt.
B) has a linear relationship with the cost of equity capital.
C) is unaffected by the tax rate.
D) decreases as the debt-equity ratio increases.
E) is equal to RU(1 − TC) .
Correct Answer:
Verified
Correct Answer:
Verified
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