Question
Star Racing (SR) has a total debt of $300 million and 4 million shares trading at $50 a share. SR's conservative CFO holds $80 million
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Star Racing (SR) has a total debt of $300 million and 4 million shares trading at $50 a share. SR's conservative CFO holds $80 million in cash and $20 million in 3-month US Treasury bills. The CFO also estimates that Star's equity and debt beta amount to 0.6 and 0.4, respectively. Based on this information, please estimate Star's unlevered beta?
a. 0.52
b. 0.47
c. 0.48
d. 0.50
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Principles Of Managerial Finance
Authors: Lawrence J Gitman, Chad J Zutter
7th Edition
0133546403, 9780133546408
