It is not possible for a firm's after-tax cost of common equity to be lower than its after-tax cost of debt.

Name: It is not possible for a firm's after-tax cost of common equity to be lower than its after-tax cost of debt.
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The after-tax cost of common equity is always higher than the after-tax cost of debt because the interest payments on debt are tax-deductible, while the dividends paid on common stock are not.

It Is Not Possible for a Firm's After-Tax Cost of Common