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Assume the Government Just Increased Corporate Tax Rates

Question 223

Multiple Choice

Assume the government just increased corporate tax rates. This change will cause the:


A) After-tax cost of debt to increase.
B) After-tax cost of equity to decline.
C) After-tax flotation cost to rise.
D) WACC to increase.
E) Target debt-equity ratio to change.

Correct Answer:

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