Which of the following is true regarding a reasonable choice for a discount rate to apply to interest tax savings?
A) If the firm is expected to increase its debt ratio, you should use the expected return on the firm's debt, 
B) If the firm is expected to maintain a constant debt ratio, you should use the firm's weighted average cost of capital, WACC.
C) If the firm is expected to decrease its debt ratio, you should use the expected return on the firm's equity, 
D) None of the above is a true statement.
Correct Answer:
Verified
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