Solved

If a Firm Adopts a Large Proportion of Above-Average-Risk Investment

Question 19

Multiple Choice

If a firm adopts a large proportion of above-average-risk investment projects that are not offset by below-average-risk investment projects, ____.


A) its cost of capital will rise
B) the average risk premium for the firm will decline
C) the risk-free rate will increase as more risk is added
D) its cost of capital will fall

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents