Which of the Following Will Increase the Cost of Equity

question 4

Multiple Choice

Which of the following will increase the cost of equity?

• A)The firm's share price falls 10 percent.
• B)The firm is expected to reduce its dividend.
• C)The firm's corporate tax rate increases.
• D)None of these answers is correct.

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Definitions:

Forecast

A prediction or estimate of future events, especially regarding weather or economic conditions.

Seasonal Fluctuations

Variations in a time series that occur at regular intervals due to seasonal events like holidays or seasons of the year.

Seasonal Indexes

Factors used in time series analysis to adjust for regular seasonal variations in data.

Regression Technique

A statistical method used to model the relationship between a dependent (target) variable and one or more independent variables.