If you assume beta is greater than 1,then which of these will increase the cost of equity capital according to CAPM? I.Increase in the risk-free rate
II) Decrease in the risk-free rate
III) Increase in the market rate of return
IV) Decrease in the market rate of return
A) III only
B) I and III only
C) I and IV only
D) II and IV only
E) II and III only
Correct Answer:
Verified
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