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All Else Constant,the Weighted Average Cost of Capital for a Risky,levered

Question 44

Multiple Choice

All else constant,the weighted average cost of capital for a risky,levered firm will decrease if:


A) the dividend yield on the ordinary shares increases
B) corporate taxes are eliminated
C) the firm replaces some of its debt with preferred shares
D) the firm's bonds start selling at a premium rather than at a discount
E) the market risk premium increases

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