Question 17 (1 point) Widget Works has a cost of equity of 17.1 percent. The market risk premium is 9.2 percent and the

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Question 17 1 Point Widget Works Has A Cost Of Equity Of 17 1 Percent The Market Risk Premium Is 9 2 Percent And The 1 (40.2 KiB) Viewed 18 times

Question 17 (1 point) Widget Works has a cost of equity of 17.1 percent. The market risk premium is 9.2 percent and the risk-free rate is 3.3 percent. The company is acquiring a competitor, which will increase the company's beta to 1.7. What effect, if any, will the acquisition have on the firm's cost of equity capital? Decrease of 2.62 percent Increase of 2.62 percent Increase of 1.84 percent No effect Decrease of 1.84 percent