11. Jay Company has a debt-to-equity ratio of 2.0. Jay is evaluating the cost of equity...

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11. Jay Company has a debt-to-equity ratio of 2.0. Jay is evaluating the cost of equity for a project in the same line of business as Cass Company (Cass) and will use the pure-play method with Cass as the comparable firm. Cass has a beta of 1.2 and a debt-to-equity ratio of 1.6. The project beta most likely: A) will be less than Jay Company's beta. B) will be greater than Jay Company's beta. C) could be greater than or less than Jay Company's beta. 11. Jay Company has a debt-to-equity ratio of 2.0. Jay is evaluating the cost of equity for a project in the same line of business as Cass Company (Cass) and will use the pure-play method with Cass as the comparable firm. Cass has a beta of 1.2 and a debt-to-equity ratio of 1.6. The project beta most likely: A) will be less than Jay Company's beta. B) will be greater than Jay Company's beta. C) could be greater than or less than Jay Company's beta.

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