Question
A company has $50,000 of debt outstanding has 10,000 shares outstanding and a stock price of $20. If the unlevered beta is 0.80, debt is
A company has $50,000 of debt outstanding has 10,000 shares outstanding and a stock price of $20. If the unlevered beta is 0.80, debt is risk-free (beta of zero) and the marginal tax rate is 20%, what is the company's levered beta?
Select one:
A. 0.75
B. 0.80
C. 0.85
D. 0.90
E. 0.96
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. Mcguigan, William J. Kretlow
9th Edition
032416470X, 9780324164701
