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You want to estimate the equity beta of Chrysler, a private auto maker. You estimate the asset beta of the auto industry to be 1.34.
You want to estimate the equity beta of Chrysler, a private auto maker. You estimate the asset beta of the auto industry to be 1.34. Chrysler has a D/E ratio of 1.5 and marginal tax rate of 21%. What is the equity beta of Chrysler? 1.34 2.84 2.50 2.93 4.12 What do we usually use for risk-free rate in equity valuation? 3-month Treasury bill yield 2-year Treasury note yield 10-year Treasury bond yield Prime rate
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