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4. The Horrid Corporation has an equity beta of 1.20 and a debt beta of 0.15. The firm's market value debt-to-equity ratio is 2/5. The

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4. The Horrid Corporation has an equity beta of 1.20 and a debt beta of 0.15. The firm's market value debt-to-equity ratio is 2/5. The tax rate is zero. What is the firm's asset beta? A. 0.78 B. 1.05 C. 0.90 5. Continuing with the previous problem, if Horrid Corporation changes its debt ratio (B/V) to 2/5, what will be its new equity beta? A. 1.05 B. 1.40 C. 0.90

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