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Question $4$

Question $4$ of $22$

Morris Industries has a capital structure of $55$ percent common stock, $10$ percent preferred stock, and $45$ percent debt. The firm has a beta of $0\mathrm{.}89$ and a tax rate of $38$ percent. Given this, which one of $1$ points save statements is correct?

$3.$ The company s systematic risk is lower than the market s systematic risk

C$.$ The aftertax cost of debt will be greater than the current yield$-$to$-$maturity on the firm's bonds

D$.$ The firm's weighted average cost of capital will remain constant as long as the capital structure remains constant

E$.$ The firm's cost of equity is unaffected by its capital structure

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Question $4$ of $22$