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