How would each of the following effect (raise, lower, no effect, or indeterminant) the cost of debt capital [rd(1-t)], the cost of equity capital [rs], and overall cost of capital [WACC]?
A. corporate tax rate is reduced.
B. Federal Reserve tightens credit
C. Dividend pay ratio is increased
D. The firm uses more debt (rd
E. Investors become more risk averse.