Which of the Following Concerns Is Likely to Be Most

question 93

Multiple Choice

Which of the following concerns is likely to be most important to portfolio investors seeking diversification?

• A)total volatility of individual securities.
• B)standard deviation of individual securities.
• C)correlation of returns between securities.
• D)achieving the risk-free rate of return.

Understand how market conditions and company policies affect the cost of capital.

Determine the cost of new equity and the effect of flotation costs.

Analyze the impact of capital structure on WACC and company valuation.

Understand the difference between before-tax and after-tax cost of debt.

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