Suppose a company's target capital structure calls for 50% debt and 50% common equity.Which of the following statements is correct?
A) The cost of equity is always equal to, or greater than, the cost of debt.
B) The WACC is calculated on a before-tax basis.
C) The WACC exceeds the cost of equity.
D) The cost of retained earnings typically exceeds the cost of new common stock.
Correct Answer:
Verified
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