How would each of the following effect the cost of debt


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.

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Financial Management: How would each of the following effect the cost of debt
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