Question
Biogen, a biotechnology firm, had a beta of 1.70 in 2014. It had no debt outstanding at the end of that year. a. Estimate the
Biogen, a biotechnology firm, had a beta of 1.70 in 2014. It had no debt outstanding at the end of that year.
a. Estimate the cost of equity for Biogen, if the Treasury bond rate is 6.4 percent.
b. What effect will an increase in long-term bond rates to 7.5 percent have on Biogens cost of equity?
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Finance For Executives Managing For Value Creation
Authors: Gabriel Hawawini, Claude Viallet
7th Edition
1473778913, 978-1473778917
