Question
You are the financial manager of a firm with a market value debt ratio (debt-to-value) of 0.5 and a cost of equity of 18.08%. The
You are the financial manager of a firm with a market value debt ratio (debt-to-value) of 0.5 and a cost of equity of 18.08%. The risk-free rate is 8.0% and the required rate of return on the market is 15.0%. Assume the tax rate is 20%. What is the beta of an unlevered firm in the same risk class as your firm?
a. 0.7 b. 0.8 c. 0.9 d. 1.0 e. 1.1
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Gapenskis Understanding Healthcare Financial Management
Authors: George H. Pink, Paula H. Song
8th Edition
1640551093, 978-1640551091
