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Currently, a firm has an equity beta of 2.5. Its existing capital mix is 40 percent risk-free debt and 60 percent equity. What is the unlevered equity beta if no borrowing involved? Ignore corporate taxes.   3.0 1.5 0.5 1.9 1.0

Currently, a firm has an equity beta of 2.5. Its existing capital mix is 40 percent risk-free debt and 60 percent equity. What is the unlevered equity beta if no borrowing involved? Ignore corporate taxes.   3.0 1.5 0.5 1.9 1.0

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Currently, a firm has an equity beta of 2.5. Its existing capital mix is 40 percent risk-free debt and 60 percent equity. What is the unlevered equity beta if no borrowing involved? Ignore corporate taxes.

 

  • 3.0
  • 1.5
  • 0.5
  • 1.9
  • 1.0

 

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