Question
Beta and Leverage: North Pole Fishing Equipment Corporation and South Pole Fishing Equipment Corporation would have identical equity betas of 1.10 if both were all-equity
Beta and Leverage: North Pole Fishing Equipment Corporation and South Pole Fishing Equipment Corporation would have identical equity betas of 1.10 if both were all-equity financed. Assume, based on financial information provided to you, that you calculate the equity beta for North Pole is 1.50, and you calculate that for South Pole is 2.00. The expected return on the market portfolio is 10.9 percent, and the risk-free rate is 3.2 percent. both companies are subject to a corporate tax rate of 35%. Assume the beta of debt is 0. What is the required rate of return for the equity of South Pole Fishing Equipment Corporation? None of these values are correct. 25.00 percent 21.00 percent 17.00 percent
(I supplied an earlier separate question asking for the north pole required quity return, and the info was suffice?)
That was all that was supplied. Can you pass along question to somoene else to have them give some opinion on it please?
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