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 retained earnings, 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 retained earnings is usually much lower than the after-tax cost of debt.
D) If a company's tax rate increases but the YTM of its noncallable bonds remains the same, the after-tax cost of its debt will fall.
Correct Answer:
Verified
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