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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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