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Question
An analyst gathers the following information for Firm A and Firm B. Use the information to compute the industry unlevered beta and the appropriate beta for Firm B to use in the WACC.
Firm A: CAPM beta = 1.6; debt-to-equity ratio = 1.2
Firm B: CAPM beta = 1.0; debt-to-equity ratio = 0.8
The appropriate beta for Firm B is closest to:
a) 1.026
b) 1.154
c) 1.170
d) 1.163
Answer
This answer is hidden. It contains 14 characters.
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