The weighted average cost of capital for a risky

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Reference no: EM13726431

All else constant, the weighted average cost of capital for a risky, levered firm will decrease if:

A. the firm's bonds start selling at a premium rather than at a discount.

B. the market risk premium increases.

C. the firm replaces some of its debt with preferred stock.

D. corporate taxes are eliminated.

E. the dividend yield on the common stock increases.

Reference no: EM13726431

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