The aftertax cost of debta varies inversely to changes in, Ask an Expert

Finance

The aftertax cost of debt:

a. Varies inversely to changes in market interest rates.

b. Is highly dependent upon the firm’s tax rate.

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

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

e. Is unaffected by changes in the market rate of interest.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91797759

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