A Very Large Firm Has a Debt Beta of Zero

question 45

Multiple Choice

A very large firm has a debt beta of zero. If the cost of equity is 11%, and the risk-free rate is 5%, the cost of debt is:

• A) 5%.
• B) 6%.
• C) 11%.
• D) 15%.

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Definitions:

Original Performance Expectations

The initial standards or goals set for a task or role before it begins.

First Six Months

This term often refers to the initial period of a new venture, job, or plan, which is critical for setting foundations and early successes.

Development Purpose

Refers to the reason or objective behind initiating development projects, usually aimed at improvement or innovation in a specific area.

Performance Objectives

Specific, measurable targets or goals that individuals or organizations aim to achieve within a certain timeframe to assess performance efficiency and effectiveness.