The cost of equity for a firm:
A) tends to remain static for firms with increasing levels of risk.
B) increases as the unsystematic risk of the firm increases.
C) ignores the firm's risks when that cost is based on the dividend growth model.
D) equals the risk-free rate plus the market risk premium.
E) equals the firm's pretax weighted average cost of capital.
F) None of the above.

Question

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The Answer of The cost of equity for a firm:
A) tends to remain static for firms with increasing levels of risk.
B) increases as the unsystematic risk of the firm increases.
C) ignores the firm's risks when that cost is based on the dividend growth model.
D) equals the risk-free rate plus the market risk premium.
E) equals the firm's pretax weighted average cost of capital.
F) None of the above.

The Cost of Equity for a Firm