Question
Company A equity=$3 billion debt = $0.7 billion beta= 1.4 tax = 40% Company b equity = $1.5b debt = zero beta = 1.8 tax
Company A equity=$3 billion debt = $0.7 billion beta= 1.4 tax = 40%
Company b equity = $1.5b debt = zero beta = 1.8 tax = 40%
Company A buys company B in cash, borrows $1.5b additional debt. Estimate Company A's beta after the acquisition
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Economics For Financial Markets
Authors: Brian Kettell
1st Edition
0750653841, 978-0750653848
