Which of the following statements is correct A A change in a companys target

Which of the following statements is correct a a

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Question: Which of the following statements is correct? AA change in a company’s target capital structure cannot affect its WACCBWACC calculations should be based on the before-tax costs of all the individual capital componentsCFlotation costs associated with issuing new common stock normally reduce the WACCDIf a company’s tax rate increases, then, all else equal, its weighted average cost of capital will declineEAn increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing
Question: The "trade-off theory" of capital structure suggests that
Question: Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Langston evaluates low-risk projects with a WACC of 8%, average-risk projects at 10%, and high-risk projects at 12%. The company is considering the following projectsProjectRiskExpected ReturnAHigh15%BAverage12%CHigh11%DLow9%ELow6%Which set of projects would maximize shareholder wealth?
Question: When taxes are considered, the value of a levered firm equals the value of theUnlevered firm
Question: Trenton Publishing follows a strict residual dividend policy. All else equal, which of the following factors would be most likely to lead to an increase in the firm’s dividend per share? AThe firm’s net income increasesBThe company increases the percentage of equity in its target capital structureCThe number of profitable potential projects increasesDCongress lowers the tax rate on capital gains. The remainder of the tax code is not changedEEarnings are unchanged, but the firm issues new shares of common stock

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