Question
Suppose a company, Citron Corporation, is an all-equity firm with stock having a beta of 0,83. Citron decided to issue new risk-free debt with a
Suppose a company, Citron Corporation, is an all-equity firm with stock having a beta of 0,83. Citron decided to issue new risk-free debt with a 4% yield and repurchase 0,56% of its stock. Assuming perfect capital markets, what will be the beta of Citron's stock after this transaction?
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
12th Edition
1439044473, 978-1439044476
