Debt usually exceeds after-tax cost of equity

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Reference no: EM131311561

Which of the following statements is correct?

Retained earnings that were generated in the past and are reflected on the firm’s balance sheet are generally available to finance the firm’s capital budget during the coming year.

The WACC is calculated using before-tax costs for all components.

The after-tax cost of debt usually exceeds the after-tax cost of equity.

The WACC that should be used in capital budgeting is the firm’s marginal, after-tax cost of capital.

Reference no: EM131311561

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