Question
A)Fristo Company has a levered beta of 1.36, its capital structure consists of 42% debt and the remaining as equity, and its tax rate is
A)Fristo Company has a levered beta of 1.36, its capital structure consists of 42% debt and the remaining as equity, and its tax rate is 40%. What would the company's beta be if it used no debt? Round your answer to two decimal places of a whole number. (Hint: Use the Hamada equation.)
Group of answer choices
1.01
0.99
0.95
1.03
0.97
B) Which of the following would always decrease a companys MVA?
Group of answer choices
Decreasing the weighted average cost of capital
Decreasing the expected growth rate of sales
Increasing the expected rate of return on invested capital
Decreasing the capital requirements (Capital/Sales)
Decreasing the expected operating profitability (NOPAT/Sales)
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