The after-tax cost of debt generally increases when a ﬁrm's bond rating increases.

Name: The after-tax cost of debt generally increases when a ﬁrm's bond rating increases.
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The after-tax cost of debt generally decreases when a firm's bond rating increases. This is because higher bond ratings indicate lower perceived risk, making it easier for the firm to borrow at lower interest rates.

The After-Tax Cost of Debt Generally Increases When a ﬁRm's