XYZ Inc. has a cost of common stock of 14%, a cost of preferred stock of 10% percent, an after-tax cost

XYZ Inc. has a cost of common stock of 14%, a cost of preferred stock of 10%

percent, an after-tax cost of debt of 4%, and a tax rate of 21%. Given this, which one of the following will reduce the firm’s WACC, given that its PE ratio is equal to 24?
A. Decreasing XYZ’s beta
B. Repurchasing shares of common stock
C. Increasing the debt-equity ratio


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