Question
Globex Corp. currently has a capital structure consisting of 35% debt and 65% equity. However, Globex Corp.'s CFO has suggested that the firm increase its
Globex Corp. currently has a capital structure consisting of 35% debt and 65% equity. However, Globex Corp.'s CFO has suggested that the firm increase its debt ratio to 50%. The current risk-free rate is 3.5%, the market risk premium is 8%, and Globex Corp.'s beta is 1.15. If the firm's tax rate is 45%, what will be the beta of an all-equity firm if its operations were exactly the same?
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Financial Times Handbook Of Corporate Finance A Business Companion To Financial Markets Decisions And Techniques
Authors: Glen Arnold
2nd Edition
0273726560, 978-0273726562
