Assume a Firm Has a Beta of 1

question 72

Multiple Choice

Assume a firm has a beta of 1.2.All else held constant, the cost of equity for this firm will increase if the:

• A)market risk premium decreases.
• B)risk-free rate decreases.
• C)market rate of return decreases.
• D)beta decreases.
• E)either the risk-free rate or the market rate of return decreases.

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Definitions:

Sales Presentation

A structured dialogue or demonstration aimed at persuading a potential buyer to purchase a product or service.

Trial Close

A technique used in sales to ask preliminary questions or make statements to gauge the customer's readiness to make the purchase.

Sales Presentation

A speech or demonstration given to persuade a potential buyer of the value and benefits of a product or service.

Buying Decision Process

The series of steps a consumer goes through, from recognizing a need to the actual purchase decision.