Question
Tollbar Cookies Inc. is 80% equity-financed, its common stock beta is 0.8, and its debt beta is 0.1. The corporate tax rate is zero. The
Tollbar Cookies Inc. is 80% equity-financed, its common stock beta is 0.8, and its debt beta is 0.1. The corporate tax rate is zero. The risk-free rate is 4% and the market risk-premium is 7%. What will be the equity beta if Tollbar is 50% debt-financed? Assume the debt beta is .14 at 50% debt.
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Local Public Finance
Authors: René Geissler, Gerhard Hammerschmid, Christian Raffer
1st Edition
3030674681, 978-3030674687
