If the firm were to shift toward a more leveraged capital structure (i.e., a greater percentage of debt in the capital structure), the weighted average cost of capital would
A. increase.
B. remain unchanged.
C. decrease.
D. not be able to be determined.
Answer:C
If the firm were to shift toward a more leveraged capital structure (i.e., a greater percentage of debt in the capital structure), the weighted average cost of capital would
A. increase. B. remain unchanged. C. decrease. D. not be able to be determined.