Multiple Choice
If the debt beta is zero, then the relationship between the equity beta and the asset beta is given by
A) equity beta = 1 + [(beta of assets) /(debt-equity ratio) ].
B) equity beta = (1 − debt-equity ratio) (beta of assets) .
C) equity beta = (1 + debt-equity ratio) (beta of assets) .
D) equity beta = 1 + (debt-equity ratio/ beta of assets) .
Correct Answer:
Verified
Correct Answer:
Verified
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