Assume the market return and risk-free rate remain unchanged

Assignment Help Financial Management

Reference no: EM131522165

Assume the market return and risk-free rate remain unchanged. Which of the following must be true if the firm's Beta suddenly changes from 0.9 to 1.8?

a. The firms cost of equity increases by 50%

b. The firm's cost of debt decreases in direct proportion to the increase in the cost of equity because the WACC must remain constant

c. The WACC of the firm increases

d. The market value of the equity increases

e. The share price will increase

Reference no: EM131522165

Questions Cloud

How many employees can you hire in year one and in year five : Explain your primary strategy to differentiate yourself from your competition. How many employees can you hire in year 1 and in year 5. 11.

Define liabilities and stockholders equity : Preferred stock has characteristics of both liabilities and stockholders' equity. Convertible bonds are another example of a financing arrangement that blurs.

Calculate the projected earnings per share : Renegade Clothing is struggling to meet analysts' forecasts. It's early December 2012, and the year-end projections are in.

What action do you recommend that the county take : What action do you recommend that the county take and what policies should the county adopt to reduce the possibility of age discrimination suits in the future?

Assume the market return and risk-free rate remain unchanged : Assume the market return and risk-free rate remain unchanged.

Topic on ecosystem connections : What can happen when you remove or add fish or nutrients to an ecosystem? Search in your textbook or on the internet for examples of case studies.

Write a summary of what you learned about company you bought : Include a brief summary of what you learned about each company (not the stock but the company) you "bought". A, B, and C.

Dermatology and cardiology : Write 2 reports (referring to the departments of Dermatology and Cardiology) and use them as your script for your Oral Report.

Discuss the concept of ecological services : In a 2 page paper, using APA-style formatting, define and discuss the concept of ecological services.

User Account

All Pages