Question: ABC's optimal capital strocture is 3 0 % debt and 7 0 % common equity. Currently, the company has 4 5 % debt and 5

ABC's optimal capital strocture is 30% debt and 70% common equity. Currently, the company has 45% debt and 55% common eqpity. If the company reduces debt level from 45% to 40%. what will happen to the cost of debt, cost common equity, and WACC?
a. increase; increase; increase
b. decrease; decresse; incresse
c. decrease; decrease; decrease
d. increase; increase; decrease
ABC's optimal capital strocture is 3 0 % debt and

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