In weighted-average cost of capital analysis, a rise in market interest rates generally leads to what?
AAn increase in the cost of debt
BAn automatic decrease in equity weight
CAn automatic increase in debt weight
DA decrease in the cost of debt
Correct answer
A. An increase in the cost of debt
Explanation
An increase in the cost of debt is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.