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The cost of equity for a firm Multiple Choice: equals the risk-free rate plus the market risk premium. tends to remain static for firms with

The cost of equity for a firm

Multiple Choice:

equals the risk-free rate plus the market risk premium.

tends to remain static for firms with increasing levels of risk.

None of the options are correct.

equals the firms pre-tax weighted-average cost of capital.

can be estimated from the capital asset pricing model or the dividend growth model.

increases as the unsystematic risk of the firm increases.

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