Question
A firm currently has $50 million in stock and $50 million in bonds and the beta on the firms stock is currently estimated to be
A firm currently has $50 million in stock and $50 million in bonds and the beta on the firms stock is currently estimated to be 1.0. If the firm changes its capital structure so that is has $25 million in stock and $75 million in bonds, what will the new beta on the firms stock be? There are no taxes.
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International Finance Discussion Papers The Credit Market Consequences Of Job Displacement
Authors: United States Federal Reserve Board, Benjamin J. Keys
1st Edition
1288704453, 9781288704453
