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The Cost of Capital for a General Foods Jell-O Plant

Question 4

Multiple Choice

The cost of capital for a General Foods Jell-O plant in Venezuela is likely to be


A) lower than for a comparable plant in the U.S. ,because its systematic risk is probably lower
B) higher than for a comparable U.S.plant because of the added risks associated with the unstable economic and political environment
C) about the same because the systematic risk is likely to be very similar
D) greatly impacted by the change in political parties in neighboring Colombia

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