Which of the following statements is correct? a. since debt financing raises the firm's financial risk, increasing the target debt ratio will always increase the wacc. b. increasing a company's debt ratio will typically reduce the marginal costs of both debt and equity financing. however, this action still may raise the company's wacc. c. since debt financing is cheaper than equity financing, raising a company's debt ratio will always reduce its wacc. d. since a firm's beta coefficient is not affected by its use of financial leverage, leverage does not affect the cost of equity. e. increasing a company's debt ratio will typically increase the marginal costs of both debt and equity financing. however, this action still may lower the company's wacc.

Suppose the government decides to issue a new savings bond that is guaranteed to double in value if you hold it for 20 years. assume you purchase a bond that costs $25. a. what is the exact rate of return you would earn if you held the bond for 20 years until it doubled in value? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. if you purchased the bond for $25 in 2017 at the then current interest rate of .27 percent year, how much would the bond be worth in 2027? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. in 2027, instead of cashing in the bond for its then current value, you decide to hold the bond until it doubles in face value in 2037. what annual rate of return will you earn over the last 10 years? (do not