All Else Equal,an Increase in Beta Results in

question 114

Multiple Choice

All else equal,an increase in beta results in

• A) an increase in the cost of retained earnings.
• B) an increase in the cost of newly issued common stock.
• C) an increase in the after-tax cost of debt.
• D) an increase in the cost of common equity, whether or not the funds come from retained earnings or newly issued common stock.

---

Definitions:

Fixed Proportions

A production scenario where inputs must be combined in strict, fixed ratios to produce an output, allowing no substitutions.

MRP

Stands for Material Requirements Planning, a system for calculating the materials and components needed to manufacture a product.

Wage Rate

The amount of money paid to workers for their services, usually expressed per hour or per unit of work done.

Competitive Employer

A firm that operates in a competitive labor market, setting wages based on supply and demand rather than having the power to influence market conditions.