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A very large firm has a debt beta of zero. If the cost of equity is 10%, and the risk-free rate is 3%, the cost
A very large firm has a debt beta of zero. If the cost of equity is 10%, and the risk-free rate is 3%, the cost of debt is:
a. 3%.
b. 6%.
c. 11%.
d. 15%.
e. It is impossible to tell without the expected market return.
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