Answer Happy

Which of the following is correct?
a. The capital structure that maximizes the stock price is
generally the capital structure that also maximizes earnings per
share
b. All else equal, an increase in the corporate tax rate
would tend to encourage a company to increase its debt ratio
c. When a company increases its debt ratio, the costs of
equity and debt both increase. Therefore, the WACC must also
increase
d. Since debt is cheaper than equity, increasing a
company's debt ratio will always reduce its WACC
e. Since debt financing raises the firm's financial risk,
increasing a company's debt ratio will always increase its WACC