All else equal, an increase in beta results in A) an increase ...

[newbem]

All else equal, an increase in beta results in
 
  A) an increase in the cost of newly issued common stock.
  B) an increase in the cost of retained earnings.
  C) an increase in the after-tax cost of debt.
  D) an increase in the cost of common equity, whether or not the funds come from retained
  earnings or newly issued common stock.

Question 2

The information effect suggests dividend policy matters because dividends act as a persuasive
  communications tool, signaling investors about the financial condition of the firm.
 
  Indicate whether the statement is true or false

[akudia]

Answer to Question 1

D

Answer to Question 2

TRUE