Question: Based on M&M Proposition I with taxes, the weighted average cost of capital: A. Is equal to RU (1 - TC). B. Decreases as the

Based on M&M Proposition I with taxes, the weighted average cost of capital:

A. Is equal to RU (1 - TC).

B. Decreases as the debt-equity ratio increases.

C. Has a linear relationship with the cost of equity capital.

D. Is equal to the aftertax cost of debt. Is unaffected by the tax rate.

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