Multiple Choice
The beta of an all-equity firm is 1.2.Suppose the firm changes its capital structure to 50% debt and 50% equity using 8% debt financing.What is the equity beta of the levered firm? The beta of debt is 0.2.(Assume no taxes.)
A) 1.2
B) 2.2
C) 2.4
D) 1.7
Correct Answer:
Verified
Correct Answer:
Verified
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