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2. ABC Corporation has an asset beta of 0.7. The risk-free rate is 4%, and the market risk premium is 6%. a. What is the

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2. ABC Corporation has an asset beta of 0.7. The risk-free rate is 4%, and the market risk premium is 6%. a. What is the required retum on ABC Corporation's assets? b. You find online that ABC has market leverage (D/V) of 40% and an equity beta of 1.0. What must ABC 's debt beta be? What is the required return on debt? The required return on equity? c. Suppose instead of the information in part b, you find that ABC has market leverage (D/V) of 60% and an equity beta of 1.25. At this leverage, what would their debt beta be? What is the required return on debt? The required retum on equity? d. Suppose, instead, that you find ABC has no debt at all. What would their equity beta be? The required return on equity

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