Consider the Following Equation: β_U = β_E

question 55

Multiple Choice

Consider the following equation: β_U = β_E + β_D
The term β_U in the equation is:

• A) the same as the beta of the firm's assets.
• B) the required return on the firm's equity.
• C) the proportion of the firm financed with equity.
• D) equal to zero if the firm's debt is riskless.

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