Calculate the asset beta for different firm that has debt

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Reference no: EM131830003

A firm with a debt (to assets) ratio of 60% and an asset beta of 1.50 faces a corporate income tax rate of 30%. (A) What is the firm’s equity beta? (B) Based on this equity beta, calculate the asset beta for a different firm that has a debt (to assets) ratio of 50% and faces a corporate income tax rate of 40%.

Reference no: EM131830003

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