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    Principles of Corporate Finance
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    Exam 17: Does Debt Policy Matter
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    The Asset Beta of a Levered Firm Is 1
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The Asset Beta of a Levered Firm Is 1

Question 16

Question 16

Multiple Choice

The asset beta of a levered firm is 1.1.The beta of debt is 0.3.If the debt equity ratio is 0.5,what is the equity beta? (Assume no taxes.)


A) 1.5
B) 1.1
C) 0.3
D) 0.15

Correct Answer:

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