Which Statement Is True

Multiple Choice

Which statement is true?

A) An increase in the market value of preferred stock will increase a firm's weighted average cost of capital.
B) The cost of preferred stock is unaffected by the issuer's tax rate.
C) Preferred stock is generally the cheapest source of capital for a firm.
D) The cost of preferred stock remains constant from year to year.
E) Preferred stock is valued using the capital asset pricing model.