Which of the following statements is CORRECT?

Group of answer choices

If a firm has been suffering accounting losses that are expected to continue into the foreseeable future, and therefore its tax rate is zero, then it is possible for the after$-$tax cost of preferred stock to be less than the after$-$tax cost of debt.

Since its stockholders are not directly responsible for paying a corporation$$s income taxes, corporations should focus on before$-$tax cash flows when calculating the WACC.

Since the costs of internal and external equity are related, an increase in the flotation cost required to sell a new issue of stock will increase the cost of retained earnings.

An increase in a firm$$s tax rate will increase the component cost of debt, provided the YTM on the firm$$s bonds is not affected by the change in the tax rate.