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What does beta measure? Firm A has a beta of 2.0 and Firm B has a beta of 1.5.Which firm has the cost of equity

  1. What does beta measure?

  1. Firm A has a beta of 2.0 and Firm B has a beta of 1.5.Which firm has the cost of equity capital?

  1. Company A has a market value per share of $20 and a book value of $4 per share.Company B has a market value of $10 per share and a book value of $10 per share.Which of these companies has a better or longer sustainable competitive advantage?

  1. Should AAA rated bonds or BBB rated bonds have higher yield spreads?

  1. Why do we multiply the pretax cost of debt by (1- marginal tax rate) to get the after-tax cost of debt?

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