Question
Suppose an all-equity firm has a beta estimated to be 1.3 . If the firm changes its capital structure such that its debt-to-equity ratio is
Suppose an all-equity firm has a beta estimated to be 1.3 . If the firm changes its capital structure such that its debt-to-equity ratio is now 0.4 , what should be the revised beta estimate if it also faces a tax rate of 30 percent? The revised beta estimate is nothing . (Round to two decimal places.)
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakin
7th Global Edition
0273754440, 9780273754442
