Cost of levered equity will be less cost of unlevered equity

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In perfect capital markets, how does leverage affect the cost of equity? a. In perfect capital markets, levered equity's cost increases with the debt-equity ratio. b. In perfect capital markets, leverage increases the cost of levered equity by the corporate bond spread. c. In perfect capital markets, leverage has no effect on the cost of levered equity. d. In perfect capital markets, the cost of levered equity will be less the cost of unlevered equity.

Reference no: EM13941139

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