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Assume a firm employs the security market line approach to determine the cost of equity. If the firm currently pays an annual dividend of $
Assume a firm employs the security market line approach to determine the cost of equity. If the firm currently pays an annual dividend of $ per share and has a beta of all else constant, which of the following actions will increase the firms cost of equity?
Multiple Choice
A decrease in the dividend amount
A decrease in the firm's beta
A decrease in the riskfree rate
An increase in the dividend amount
A decrease in the market rate of return
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