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1. Increasing GDP growth and declining inflation are examples of: I. Systematic Risk II. Market Risk III. Diversifiable Risk IV. Unsystematic Risk I and II
1. Increasing GDP growth and declining inflation are examples of:
I. Systematic Risk
II. Market Risk
III. Diversifiable Risk
IV. Unsystematic Risk
- I and II only
- I and III only
- II and IV only
- I, II and III only
- I, II, III and IV
2. A firm is considering a project which requires an initial investment of $2.75 million. The target D/E ratio is 0.75. Flotation costs for equity are 7.15% and flotation costs for debt are 3.37%. What is the true cost, in dollars, of the project when flotation costs are considered?
A) $2.85 million
B) $2.91 million
C) $3.32 million
D) $3.46 million
E) $3.61 million
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