Question
What is the beta for a firm with 40% equity and 60% debt if a similar firm with 55% equity and 45% debt has a
What is the beta for a firm with 40% equity and 60% debt if a similar firm with 55% equity and 45% debt has a levered beta of 1.3? Corporate tax rate is 40%.
A. 1.40
B. 2.41
C. 1.66
D. 1.31
E. 0.88
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Essentials of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
10th edition
77835425, 978-0077835422
