A tax-paying firm is currently financed with 50% debt and 50% equity.The after-tax cost of debt is 6% and the cost of equity is 12%.If the firm issues some 8% preferred stock at par,then the firm's WACC will:
A) increase.
B) decrease.
C) either increase or decrease depending upon the amount of stock issued.
D) not be affected.
Correct Answer:
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