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3. bupmse MM holds and there are no lrietiehs (Le. no taxes or haeknmtey costs; in the mummy. Denote rm 1-D and n; as the
3. bupmse MM holds and there are no lrietiehs (Le. no taxes or haeknmtey costs; in the mummy. Denote rm 1-D and n; as the required rate of retlu-us on assets, debt and equity, resptmtively. Which of the following is NOT true? A. m meet be higher than both r5,- and 1-5. B. The market beta of assets cannot be higher than both the market beta of equity and debt. C. It is possible that 13.1 = 713. D. n: has to be the same as the riskEm rate because there are no tamknlptey costs. E. The leverage of the rm might affect 1'3 but not 134
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