15) The chief executive officer (CEO) of Telvor communications Inc., a US telecom firm, appears on a ‘business news’ tel

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15) The chief executive officer (CEO) of Telvor communications
Inc., a US telecom firm, appears on a ‘business news’ television
program. She suggests that the firm’s future earnings will be
stable, and that the firm’s debt/equity (D/E) ratio will be
constant. A likely objective for her TV appearance is:
A) She wants to convince investors that Telvor earnings growth
will rise. B) She wants to suggest that the firm’s cost-of-equity
is increasing, to support a higher stock price. C) She wants to
indicate that Telvor’s interest tax shield will expand, thus
supporting a higher stock price. D) She wants to convince investors
that Telvor deserves a lower weighted-average-cost-of-capital
(WACC), in order to support a higher firm value.