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The cost of equity for a firm: A. tends to remain static for firms with increasing levels of risk. B. increases as the unsystematic risk of the firm increases. C. ignores the firm's risks when that cost
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The cost of equity for a firm:

A. tends to remain static for firms with increasing levels of risk.
B. increases as the unsystematic risk of the firm increases.
C. ignores the firm's risks when that cost is based on the dividend growth model.
D. equals the risk-free rate plus the market risk premium.
E. equals the firm's pretax weighted average cost of capital.

User Nebulosar
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The answer is C! Ignores the firm risks when that cost is based on divided growth model.
User Collardeau
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