A Very Large Firm Has a Debt Beta of Zero

question 23

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%.
• E) It is impossible to tell without the expected market return.

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Definitions:

Wisdom

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Novel Problems

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