Question: True or False, explain the reason 1A (1 point) For an unlevered firm (which has no excess cash), the equity beta is the same as

True or False, explain the reason

1A (1 point)

For an unlevered firm (which has no excess cash), the equity beta is the same as the asset beta.

1B (1 point)

For a "typical" investment, the IRR rule coincides with the NPV rule.

1C (1 point)

In competitive markets, if an unlevered firm eventually pays dividends, does not do share repurchases, and is never acquired, its stock price is equal to the present value of all future dividends.

1D (1 point)

When there are no financial frictions such as taxes or costs of financial distress, the WACC

goes down as leverage increases.

1E (1 point)

In perfect capital markets, a share repurchase (when the firm buys back shares) does not change the price of one outstanding share.

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