Based on M & M Proposition II with Taxes,the Weighted

Multiple Choice

Based on M & M Proposition II 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 R_U × (1 - T_C) .