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$0$:$25$:$51$

MC$.15\mathrm{.}045$

Question $15$ of $30$ :

Which of the following statements is CORRECT?

a$.$ Increasing a company's debt ratio will typically increase the marginal cost of both debt and equity financing. However, this action still may lower the company$/$s Wacc

b$.$ Since debt financing is cheaper than equity financing, raising a company's debt ratio will always reduce its WACC.

c$.$ Since debt financing raises the firm's financial risk, increasing a company's debt ratio will always increase its WACC.

d$.$ Increasing a company's debt ratio will typically reduce the marginal cost of both debe and equity financing. However, this action sill may raise the companys Wacc

e$.$ Since a firm's beta coefficient it not affected by its use of financial leverage, leverage does not affect the cost of equity.