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Question 7 Hamadas equation can be used to estimate the change of beta resultant from a change in leverage. Suppose a company has a beta

Question 7

Hamadas equation can be used to estimate the change of beta resultant from a change in leverage. Suppose a company has a beta of 2,00 with a debt/equity ratio of 2 and that the applicable tax rate is 28%. What would the unlevered beta be for the company as determined by the equation?

A. 0.29

B. 0.82

C. 1.00

D. 2.00

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