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please help don't have much time!! just need answer will upvote CMR has no debt. The stock's beta is 1.5 and its expected profitability, RE,
please help don't have much time!! just need answer will upvote
CMR has no debt. The stock's beta is 1.5 and its expected profitability, RE, is 15%. The company decides to go into debt at the risk-free rate, Rf, of 5% to buy back 50% of its shares. Capital markets are supposed to be perfect.
calculate the beta of CMR shares after the repurchase transaction.
a)1.5
b)2
c)3
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