Which of the following is usually the lowest?

A) After-tax cost of debt
B) Before-tax cost of debt
C) Cost of preferred stock
D) Cost of common stock
E) Marginal cost of capital

Question

Which of the following is usually the lowest?A) After-tax cost of debtB) Before-tax cost of debtC) Cost of preferred stockD) Cost of common stockE) Marginal cost of capital

brittney litton · Accepted Answer

Final Answer : A, Explanation :  The after-tax cost of debt is usually the lowest among the options provided because interest expenses on debt are tax-deductible, which reduces the effective cost of borrowing for companies.

Which of the following is usually the lowest?

A) After-tax cost of debt
B) Before-tax cost of debt
C) Cost of preferred stock
D) Cost of common stock
E) Marginal cost of capital

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