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Assume a Modigliani and Miller (MM) world with perfect capital markets. MichaelKors Ltd (MK) has no debt, a total equity capitalization of 20 billion, and
- Assume a Modigliani and Miller (MM) world with perfect capital markets. MichaelKors Ltd (MK) has no debt, a total equity capitalization of 20 billion, and a beta of 1.8. Included in MK's assets are 4 billion in cash and risk-free securities. Considering the fact that MK's cash is risk-free, the unlevered beta of MK is closest to:
- A) 2.25
- B) 1.50
- C) 1.45
- D) 1.90
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
13th edition
1285198840, 978-1285198842
