Question
the equity beta of a firm that is financed with 40% debt and 60% equity is 1.6. The beta of the debt is 0.1. The
the equity beta of a firm that is financed with 40% debt and 60% equity is 1.6. The beta of the debt is 0.1. The expected return on the market is 10%, and the risk-free rate is 5%. What rate of return should this firm require on its projects?
- 5.5%
- 10.0%
-13.0%
-15.0%
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Foundations Of Finance
Authors: Arthur J. Keown, John H. Martin, J. William Petty
10th Edition
0135160618, 978-0135160619
