Aroma Chemicals has a debt‐to‐equity ratio of 0.7. The company’s weighted average cost of capital (WACC) is 8%, while it

[answerhappygod]

Aroma Chemicals has a debt‐to‐equity ratio of 0.7. The company’s
weighted average cost of capital (WACC) is 8%, while its cost of
equity is 12%. Given a marginal tax rate of 30%, the company’s
after‐tax cost of debt is closest to:
Group of answer choices
2.29%
3.27%
4.35%
What is the primary thesis of Modigliani–Miller propositions
regarding companies changing their capital structure and the value
of their firms?
Group of answer choices
It does not change value.
It adds value.
It subtracts value.