A firm has a cost of equity of 13 percent,a cost of preferred of 11 percent,and an aftertax cost of debt of 6 percent.Given this,which one of the following will increase the firm's weighted average cost of capital?
A) Increasing the firm's tax rate
B) Issuing new bonds at par
C) Redeeming shares of common stock
D) Increasing the firm's beta
E) Increasing the debt-equity ratio
Correct Answer:
Verified
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