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Please refer to the equation given below to answer the following questions: Assume that all other variables in the equation do not change L =
Please refer to the equation given below to answer the following questions: Assume that all other variables in the equation do not change where Levered Beta for equity in the firm Unlevered beta of the firm ie the beta of the firm without any debt Corporate tax rate DebtEquity Ratio An increase in the Debt results in a An increase in growth rate b An increase in cost of equity c A decrease in cost of equity d An increase in firm value e None of the above An increase in the equity results in a An increase in growth rate b An increase in cost of equity c A decrease in cost of equity d An increase in firm value e None of the above An increase in tax rate results in a An increase in growth rate b An increase in cost of equity c A decrease in cost of equity d An increase in firm value e None of the above An increase in unleveraged beta results in a An increase in growth rate b An increase in cost of equity c A decrease in cost of equity d An increase in firm value e None of the above
Please refer to the equation given below to answer the following questions:
Assume that all other variables in the equation do not change
where
Levered Beta for equity in the firm
Unlevered beta of the firm ie the beta of the firm without any debt
Corporate tax rate
DebtEquity Ratio
An increase in the Debt results in
a An increase in growth rate
b An increase in cost of equity
c A decrease in cost of equity
d An increase in firm value
e None of the above
An increase in the equity results in
a An increase in growth rate
b An increase in cost of equity
c A decrease in cost of equity
d An increase in firm value
e None of the above
An increase in tax rate results in
a An increase in growth rate
b An increase in cost of equity
c A decrease in cost of equity
d An increase in firm value
e None of the above
An increase in unleveraged beta results in
a An increase in growth rate
b An increase in cost of equity
c A decrease in cost of equity
d An increase in firm value
e None of the above
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