Question
XYZ has a capital structure of 20% debt and 80% equity, its tax rate is 20%, and its beta (leveraged) is 1.44. Based on the
XYZ has a capital structure of 20% debt and 80% equity, its tax rate is 20%, and its beta (leveraged) is 1.44. Based on the Hamada equation, what would the firm's beta be if it used no debt, i.e., what is its unlevered beta, bU?
Group of answer choices
none of the above
0.67
1.20
0.87
1.44
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Healthcare Finance An Introduction To Accounting And Financial Management
Authors: Louis C. Gapenski
2nd Edition
1567931650, 978-1567931655
