Question
Q4. Peter plc.has a market capitalization of $60billion,$40 billionin debt, and $10 billion in cash. If Peters equity beta is 1.2, then if assuming debt
Q4. Peter plc.has a market capitalization of $60billion,$40 billionin debt, and $10 billion in cash. If Peters equity beta is 1.2, then
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if assuming debt beta is zero, its unlevered beta should be the same as equity beta.
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if assuming non-zero debt beta and if the rating of its debt has been upgraded from AA to AAA, its unlevered beta would have remained the same.
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if assuming non-zero debt beta and if the rating of its debt has been downgraded from AA to A, its unlevered beta would have reduced.
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Noneoftheabove
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The Economics Of Money Banking And Financial Markets
Authors: Frederic S. Mishkin
11th Global Edition
1292094184, 978-1292094182
