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Firm F and Firm H have identical assets whose beta is 1.3. Firm F has a debt-tovalue ratio of 0.1 while Firm H has a
Firm F and Firm H have identical assets whose beta is 1.3. Firm F has a debt-tovalue ratio of 0.1 while Firm H has a debt-to-value ratio of 0.8. Which of the following statements is always correct under perfect capital markets.
A. The of the debt of Firm F is higher than the of the debt of Firm H
B. The of the debt of Firm F is higher or equal than the of the debt of Firm H
C. The of the equity of Firm F is equal to the of the equity of Firm H
D. The of the equity of Firm F is lower or equal than the of the equity of Firm H
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