The After-Tax Cost of Debt to a Corporation Is Less

The after-tax cost of debt to a corporation is less than the after-tax cost of equity because:

A) Dividends are tax deductible to the corporation and so the corporation can offer investors a higher return
B) Interest expense is tax deductible to the corporation
C) Debt includes depreciation which is a pre-tax charge against earnings
D) Dividends are paid out of pre-tax dollars
E) None of the above