A firm's overall cost of equity is unaffected by changes in the market risk premium.

Name: A firm's overall cost of equity is unaffected by changes in the market risk premium.
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Question

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The cost of equity for a firm is influenced by the market risk premium, as it is a component of the Capital Asset Pricing Model (CAPM) used to calculate the cost of equity. Changes in the market risk premium directly affect the cost of equity.

A Firm's Overall Cost of Equity Is Unaffected by Changes