Comparing Two Otherwise Equal fiRms, the Beta of the Common

question 44

Multiple Choice

Comparing two otherwise equal firms, the beta of the common equity of a levered firm is ____________ than the beta of the common equity of an unlevered firm.

• A)equal to
• B)significantly less
• C)slightly less
• D)greater
• E)None of the above.

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Definitions:

Adrenocorticotropin Hormone

A hormone produced by the pituitary gland that stimulates the adrenal glands to release cortisol and other hormones.

Sulfonylurea

A class of medications used to treat type 2 diabetes by increasing insulin production in the pancreas.

Oral Hypoglycemic Agent

Medications taken by mouth to lower blood sugar levels in people with diabetes.

Metformin

A medication commonly used to treat type 2 diabetes by decreasing glucose production in the liver and improving insulin sensitivity.