The $\beta$ of all equity firm versus the $\beta$of the same firm with leverage is different:
A) by the impact of business risk.
B) by the $\beta$ of the assets.
C) because the $\beta$ of the assets are not exposed to financial leverage.
D) because the $\beta$ of the assets are exposed to financial leverage.

Question

Quizplus · Accepted Answer

The $\beta$ of the assets are not exposed to financial leverage, whereas the $\beta$ of the equity is affected by the firm's leverage.

The β\betaβ Of All Equity Firm Versus The β\betaβ Of the Same Firm with Leverage Is Different: A) by the Same

The $\beta$ Of All Equity Firm Versus The $\beta$ Of the Same Firm with Leverage Is Different:
A) by the Same