Assume the market return and risk-free rate remain, Financial Management

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Assume the market return and risk-free rate remain

Assume the market return and risk-free rate remain unchanged. Which of the following must be true if the firm's Beta suddenly changes from 0.9 to 1.8?

a. The firms cost of equity increases by 50%

b. The firm's cost of debt decreases in direct proportion to the increase in the cost of equity because the WACC must remain constant

c. The WACC of the firm increases

d. The market value of the equity increases

e. The share price will increase

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Financial Management: Assume the market return and risk-free rate remain

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