Which of the following statements is CORRECT?

a.       When calculating the cost of preferred stock, a company needs to adjust for taxes, because preferred stock dividends are deductible by the paying corporation.

b.      All else equal, an increase in a company’s stock price will increase its marginal cost of retained earnings, rs.

c.       All else equal, an increase in a company’s stock price will increase its marginal cost of new common equity, re.

d.      Since the money is readily available, the after-tax cost of retained earnings is usually much lower than the after-tax cost of debt.

e.      If a company’s tax rate increases but the YTM on its noncallable bonds remains the same, the after-tax cost of its debt will fall.