1. Chapter MC, Section .09. Problem 006 Which of the following statements is CORRECT? Oa. All else equal, an increase in a company's stock price will increase its marginal cost of new common equity, re. ob. When calculating the cost of preferred stock, a company needs to adjust for taxes, because preferred stock dividends are deductible by the paying corporation. Oc. If a company's tax rate increases but the YTM on its noncallable bonds remains the same, the after-tax cost of its debt will fall. Od. Since the money is readily available, the after-tax cost of reinvested earnings (not newly issued stock) is usually much lower than the after-tax cost of debt. ce. All else equal, an increase in a company's stock price will increase its marginal cost of reinvested earnings (not newly issued stock), s