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The Bookstore Inc. is a levered company. The company has 230,000 equity shares outstanding trading at $145 each. The Bookstore's debt consists of 171,000 bonds
The Bookstore Inc. is a levered company. The company has 230,000 equity shares outstanding trading at $145 each. The Bookstore's debt consists of 171,000 bonds with a current quote of $105. The Bookstore's equity has the same level of systematic risk as a portfolio that has a 65 percent share in the market portfolio and 35 percent in Treasury bills. The corporate tax rate is zero and there is no bankruptcy risk. What is The Bookstores unlevered equity beta? A. 0.4225 B. 0.3564 0 0 0 C. 0.6465 D. 0.7421 E. 1.2139
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