Which of the Following Statements Is CORRECT

Multiple Choice

Which of the following statements is CORRECT?

A) all else equal, an increase in a company's stock price will increase its marginal cost of reinvested earnings (not newly issued stock) , rs.
B) all else equal, an increase in a company's stock price will increase its marginal cost of new common equity, re.
C) since the money is readily available, the after-tax cost of reinvested earnings (not newly issued stock) is usually much lower than the after-tax cost of debt.
D) if a company's tax rate increases but the ytm on its noncallable bonds remains the same, the after-tax cost of its debt will fall.
E) when calculating the cost of preferred stock, a company needs to adjust for taxes, because preferred stock dividends are deductible by the paying corporation.