Which one of the following statements related to WACC is correct for a firm that uses debt in its capital structure?
The WACC will decrease as the corporate tax rate decreases.
The WACC should decrease as the firm's debt-equity ratio increases.
The weight of equity is based on the number of shares outstanding and the book value per share.
The WACC will remain constant unless a firm retires some of its debt.
The weight assigned to preferred stock decreases as the market value of the stock increases.