Compute firm weighted average cost of capital


A firm has a cost of equity of 13 percent, cost of preferred stock of 11 percent, and after tax cost of debt os 6 percent. Given this, whch of the following will increase the firm's weighted average cost of capital?

Increasing the firm;s tax rate

Issuing new bonds at par

Redeeming shares of common stock

Increasing the firm's beta

Increasing the debt-equity ratio

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Finance Basics: Compute firm weighted average cost of capital
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