The expected return of LaTrax is 2.5%. If treasury bills return 5% and the market risk premium is positive, what must be true about the beta of LaTrax? Why might an investor choose to buy this stock? Beta is negative; the stock can be used as a hedge Beta is positive; no investor would choose to buy this stock Beta is positive; the stock can be used as a hedge Beta is negative; no investor would choose to buy this stock ChatBOXX does not always produce positive income and therefore it estimates that the risk of its tax shields is greater than the required return for debt (rd). In other words, rd is not the correct discount rate to value future interest tax shields. Given this, how does the present value of all future tax shields compare to TcD ? PV Tax Shields >TCD PV Tax Shields =TcD PV Tax Shields