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    Exam 12: Designing an Optimal Capital Structure
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    Big City Lumber Inc
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Big City Lumber Inc

Question 4

Question 4

Multiple Choice

Big City Lumber Inc.has a levered beta of 1.70,a debt-equity ratio of 0.40,and a tax rate of 25%.What is the value of the firm's unlevered beta?


A) 0.78
B) 1.00
C) 1.31
D) 1.70

Correct Answer:

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