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Only true or false answers Firms with high infrastructure and rigid cost structures should have higher betas than firms with flexible cost structures. Smaller firms
Only true or false answers Firms with high infrastructure and rigid cost structures should have higher betas than firms with flexible cost structures. Smaller firms should have lower betas than large firms. Mature firms should have higher betas than younger firms. The higher the debt ratio of a firm, the higher its equity ratio, because debt and equity are the only two sources of capital. The cost of debt reflects not only the default risk of a company, but also the level of interest rates in the market. A utility company has stable and predictable cash-flows (reducing the risk of financial distress), and it knows its future investments (reducing the need for flexibility). Therefore, utility companies can carry higher debt ratios than the average. Is this last statement true or false? Firms that sell high-priced goods/services should have lower betas than firms that low-priced goods/services
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