Question: For a company, whose target capital structure calls for 50% debt and 50% common equity, which of the following statements is CORRECT? a.) The cost

For a company, whose 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 less than or equal to the cost of debt
b.) A change in a companys target capital structure will not affect its WACC
c.) The WACC is calculated using before-tax costs for all components.
d.) An increase in the risk-free rate will increase the marginal cost of debt financing.
e.)

The WACC exceeds the cost of equity.

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