All else constant, which one of the following will increase the capital structure weight of debt as used in the computation of a firm's weighted average cost of capital?
A) An increase in the firm's tax rate.
B) A decrease in the market value of the firm's debt.
C) An increase in the number of preferred shares outstanding.
D) A decrease in the number of common shares outstanding.
E) An increase in the prepayment of a bond issue.
Correct Answer:
Verified
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