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The finance manager of NN Co. estimated the following Unlevered beta (B UL ) 1.75 Debt to equity ratio (D/E) 40.00% Tax rate (t) 30%
| The finance manager of NN Co. estimated the following | |
| Unlevered beta (BUL) | 1.75 |
| Debt to equity ratio (D/E) | 40.00% |
| Tax rate (t) | 30% |
| Risk free rate | 3% |
| Market risk premium | 5% |
| By how much would the capital structure shift change the Co's cost of equity? |
| A- Less than 1% |
| b- Between 1% and 1.10% |
|
| c- between 2% and 3% |
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Corporate Finance Core Principles And Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
6th Edition
9781260571127
