For a typical firm, which of the following sequences is CORRECT? All rates are after taxes, and assume that the firm operates at its target capital structure.
A. rs> re> rd> WACC.
B. re> rs> WACC > rd.
C. WACC > re> rs> rd.
D. rd> re> rs> WACC.
E. WACC > rd> rs> re.
Answer: B
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