If Expectations for Long-Term Inflation Rose, but the Slope of the SML

question 3

True/False

If expectations for long-term inflation rose, but the slope of the SML remained constant, this would have a greater impact on the required rate of return on equity, rs, than on the interest rate on long-term debt, rd, for most firms. Therefore, the percentage point increase in the cost of equity would be greater than the increase in the interest rate on long-term debt.

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A rectangle that is used to describe the outer boundary of a geometric shape or object in 2D or 3D space.

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The method in graphical user interfaces that triggers a component to be redrawn.

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An interface in Java that handles window events, such as opening, closing, or minimizing a window.

WindowListener Interface

An interface in the Java AWT package for receiving window events, such as opening, closing, or minimizing a window.