Question:

Would you expect the cost of equity to be higher for a $1 billion or $100 million market cap company?

Answer hidden.

Answer:

We would expect the cost of equity to be higher for the $100 million market cap company because all else being equal, smaller companies are considered "riskier" than larger companies.

This means that investors in the $100 million company would expect a higher return (or higher cost of equity) to reflect the higher risk.

Other

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