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RobCo is a company that makes robots for a variety of applications. A similar company, Cyberdyne Industries, is 100% equity and has a beta of

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RobCo is a company that makes robots for a variety of applications. A similar company, Cyberdyne Industries, is 100% equity and has a beta of 1.2. If RobCo is 78% debt financed, and the rest is equity financed, what is RobCo's equity beta if the tax rate is 22% ? Stock XYZ has an expected return of 3.0%. The S\&P500 has an expected return of 9.0%. The riskless rate is 8.0% and XYZ 's beta is 8.0. is XYZ overpriced or underpriced according to CAPM? Answer 1 for underpriced and 1 for overpriced

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