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Find the firms current leveraged beta using the CAPM
Course:- Financial Management
Reference No.:- EM13942999





Assignment Help >> Financial Management

A company is estimating its optimal capital structure that consists of 20% debt 880%equity, based on market values (debt to equity D/S ratio is 0.25). The risk free rate is 5% and the marker risk premium is 6%. Currently the company's cost of equity. Which is based on the CAPM, is 14% and its tax rate is 20%. Find the firm's current leveraged beta using the CAPM A) 1.0 B) 1.5 C) 1.6 D) 1.7




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