=4/Deutsche Telekom and France Telecom have a similar economic risk. The beta of France Telecom shares is 1.4, and is 1.1 for Deutsche Telekom. If the no-risk cash rate is 3.5%

and the risk premium is 6%, what are the shareholders’ required returns? If the net debt/

shareholders’ equity ratio is 1.5 in value for France Telecom, what is it for Deutsche Telekom which has debts of 4% compared with 4.5% for France Telecom (imagine that this is a tax-free world)?