If the capital asset pricing model is used, the cost of equity depends on
1) the firm's earnings growth rate
2) the firm's beta
3) the return on the market
A) 1 and 2
B) 1 and 3
C) 2 and 3
D) 1, 2, and 3
Correct Answer:
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Q32: If equity is negative,
A) debt exceeds total
Q33: In order to maximize the value of
Q34: The average cost of capital is the
Q35: The cost of equity
1) is less than
Q36: The optimal capital structure is the firm's
Q38: Debt financing
1) increases stockholders' return more than
Q39: If a firm must issue subordinated debentures
Q40: The cost of capital includes
1) cost of
Q41: In the capital assets pricing model, the
Q42: Given the following information:
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