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Consider the Following Equation

Question 28

Multiple Choice

Consider the following equation:
ΒU = Consider the following equation: Β<sub>U</sub> = Β<sub>E</sub> + Β<sub>D</sub> The term β<sub>U</sub> in the equation is: A) the same as the beta of the firm's assets. B) the required return on the firm's equity. C) the proportion of the firm financed with equity. D) equal to zero if the firm's debt is riskless.
ΒE + Consider the following equation: Β<sub>U</sub> = Β<sub>E</sub> + Β<sub>D</sub> The term β<sub>U</sub> in the equation is: A) the same as the beta of the firm's assets. B) the required return on the firm's equity. C) the proportion of the firm financed with equity. D) equal to zero if the firm's debt is riskless.
ΒD
The term βU in the equation is:


A) the same as the beta of the firm's assets.
B) the required return on the firm's equity.
C) the proportion of the firm financed with equity.
D) equal to zero if the firm's debt is riskless.

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