Question
Defense Inc has an EV of $200 million, debt of $50 million and a cash balance of $20 million. It currently has a levered beta
Defense Inc has an EV of $200 million, debt of $50 million and a cash balance of $20 million. It currently has a levered beta of 1.50. It is considering using the cash to buy back its shares. Estimate the levered beta after the share buyback transaction. (The marginal tax rate is 20%).
Select one:
A. 1.51
B. 1.12
C. 1.54
D. 1.82
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International Finance Theory And Policy
Authors: Steven Michael Suranovic
1st Edition
193612646X, 9781936126460
