The aftertax cost of debt: Multiple Choice varies inversely to changes in market interest rates. will...

Question

Question

The aftertax cost of debt: Multiple Choice

varies inversely to changes in market interest rates.

will generally exceed the cost of equity if the relevant tax rate is zero.

will generally equal the cost of preferred if the tax rate is zero.

is unaffected by changes in the market rate of interest.

is highly dependent upon a company's tax rate.

Answer 1

Answer #1

The aftertax cost of debt is highly dependent upon a company's tax rate Option E is correct, The remaining provided options are not correct.

Answer 2

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