Which of the following statements is correct?
1.) A firm's weighted cost of capital should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and all other factors are held constant.
2.) The market value of a firm's debt and equity will continuously change throughout the day, but the book value of debt and equity tends to stay more stable over time. Consequently, the firm should use the book-value weight to define its optimal capital structure.
3.) A firm's after-tax cost of preferred stock may be significantly less than its before-tax cost, because issuing preferred stock dividends creates a tax shelter.
1.) A firm's weighted cost of capital should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and all other factors are held constant.

Question

Daisy5987 Daisy5987

30-11-2022
Business

contestada

Which of the following statements is correct?
1.) A firm's weighted cost of capital should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and all other factors are held constant.
2.) The market value of a firm's debt and equity will continuously change throughout the day, but the book value of debt and equity tends to stay more stable over time. Consequently, the firm should use the book-value weight to define its optimal capital structure.
3.) A firm's after-tax cost of preferred stock may be significantly less than its before-tax cost, because issuing preferred stock dividends creates a tax shelter.
1.) A firm's weighted cost of capital should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and all other factors are held constant.

Respuesta :

Otras preguntas

C is comedy and D is horror

if the diameter of a circle is 14cm What is the measure of its circumference ? find it

help me with this plz no links plz

Read the sentence from the article’s introduction [paragraphs 1-6]. A number of popular items, including cream cheese, have gone scarce amid supply chain disrup

Consider this sequence of transformations on a shape: • A rotation about a point P • A translation • Another rotation about Which must be preserved under this s

Which statement best completes the diagram? Cause Effect Andrew Jackson shuts down the Second Bank of the United States, ? A. Foreign banks take over most Ameri

what is full form of CCTV...??????

Math answer plz need help with this plz answer 17,16

A player puts 3 balls of different color into 4 empty baskets. What is the probability that the maximum number of balls in a single basket is 2?

Which graph represents a function? [PLS HELP]

contexto38 contexto38 · Answer 1 · 2022-12-03T17:12:58+01:00

If a company's tax rate goes up, but all other variables stay the same and the yield to maturity of its noncallable bonds doesn't change, then its weighted cost of capital should go down. The right response in this case is option A.

The weighted average cost of capital (WACC) is the average rate an organization pays to finance its assets (WACC). It is determined by averaging the rates of all the company's capital sources and weighting the results according to the relative importance of each component.

They also overwhelmingly suggest that tax hikes can enhance government revenue, but frequently at the price of citizens' economic mobility and progress.

To learn more about weighted cost

https://brainly.com/question/28561354

#SPJ4