6. The cost of capital for a firm in a tax-free environment is

A. equal to the market value weighted average of the required rate of return on equity and debt.

B. equal to rA, the required rate of return on assets in the same business risk class.

C. equal to rE, the required rate of return on equity.

D. equal to the market value weighted average of the required rate of return on equity and debt; equal to rA, the required rate of return on assets in the same business risk class.