Question
Multiple Choice: I am performing the valuation of a new division. I found the beta (equity beta) of a peer (XYZ) which is 0.8. XYZ
Multiple Choice:
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I am performing the valuation of a new division. I found the beta (equity beta) of a peer (XYZ) which is 0.8. XYZ has. D/E ratio of 1.2 and a corporate tax rate of 25%. My new division will have a D/E of 1.8 and a tax rate of 32%. Please calculate the beta that I should use for this new division using the formulas learnt in class:
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0.55
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0.8
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0.934
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0.42
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The Basics Of Public Budgeting And Financial Management
Authors: Charles E. Menifield
4th Edition
0761872116, 978-0761872115
