Assume a firm has a beta of 1.2. All else held constant, the cost of equity for this firm will increase if: the risk-free rate decreases. the market rate of return decreases. the market risk premium stays constant. the beta decreases.
Assume a firm has a beta of 1.2. All else held constant, the cost of equity for this firm will increase if: the risk-free rate decreases. the market rate of return decreases. the market risk premium stays constant. the beta decreases.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 15MC: Assume that Temp Force has a beta coefficient of 1.2, that the risk-free rate (the yield on T-bonds)...
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Assume a firm has a beta of 1.2. All else held constant, the
the risk-free rate decreases.
the market rate of return decreases.
the market risk premium stays constant.
the beta decreases.
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