If Expectations for Long-Term Inflation Rose,but the Slope of the SML

question 48

True/False

If expectations for long-term inflation rose,but the slope of the SML remained constant,this would have a greater impact on the required rate of return on equity,r_s,than on the interest rate on long-term debt,r_d,for most firms.In other words,the percentage point increase in the cost of equity would be greater than the increase in the interest rate on long-term debt.

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A marketing partnership between two or more brands that combine their products, services, or identities to increase recognition and value.