Question
El Football Goods has a capital structure of 50% debt and 50% equity, its tax rate is 35%, and its beta (leveraged) is 1.35. Based
El Football Goods has a capital structure of 50% debt and 50% equity, its tax rate is 35%, and its beta (leveraged) is 1.35.
Based on the Hamada equation, what would the firm's beta be if it used no debt, i.e., what is its unlevered beta, bU? Show your calculations, if any, and explain your answer.
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Health Care Finance Basic Tools For Nonfinancial Managers
Authors: Judith J. Baker, R.W. Baker, Neil R. Dworkin
5th Edition
1284118215, 978-1284118216
