Question
A firm currently has $50 million of debt and $50 million of equity outstanding. The firms cost of equity is currently 18%. What will the
A firm currently has $50 million of debt and $50 million of equity outstanding. The firms cost of equity is currently 18%. What will the beta of the firm be if it changes its capital structure to 100% equity? The risk premium of the market is 8%, the risk-free rate is 2% and the tax rate is 25%.
| a. | 1.14 | |
| b. | 2.00 | |
| c. | 1.63 | |
| d. | 1.38 |
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Handbook Of Research On Theory And Practice Of Financial Crimes
Authors: Abdul Rafay
1st Edition
1799855678, 978-1799855675
