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A Company's Overall Cost of Equity Is

Question 3

Multiple Choice
A company's overall cost of equity is:

A company's overall cost of equity is:


A) generally less than its WACC given a debt-equity ratio of .5.
B) unaffected by changes in the market risk premium.
C) directly related to the risk level of the firm.
D) generally less than the firm's aftertax cost of debt.
E) inversely related to changes in the level of inflation.

Correct Answer:

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