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Your Firm Is Planning to Invest in a New Electrostatic

Question 28

Multiple Choice

Your firm is planning to invest in a new electrostatic power generation system.Electrostat Inc is a firm that specializes in this business.Electrostat has a stock price of $25 per share with 16 million shares outstanding.Electrostat's equity beta is 1.18.It also has $220 million in debt outstanding with a debt beta of 0.08.Your estimate of the asset beta for electrostatic power generators is closest to:


A) 0.76.
B) 0.79.
C) 0.93.
D) 1.10.

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