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Lavazza Coffee is a publicly traded company that sells coffee beans. It has 10 million shares outstanding, trading at $5 per share, with no debt
Lavazza Coffee is a publicly traded company that sells coffee beans. It has 10 million shares outstanding, trading at $5 per share, with no debt or cash, and has a beta of 0.75. He is considering borrowing $25 million and investing in coffee shops. If the beta of cafes/restaurants is 1.20, calculate the beta of Lavazza's equity after the expansion. (The marginal tax rate is 40%).
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To calculate Lavazzas equity beta after the expansion we first need to understand what beta is Beta ...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
