BUS 172A 42608 By regression analysis using stock return data, the raw beta is estimated to be 1.4.
June 7th, 2024
By regression analysis using stock return data, the raw beta is estimated to be 1.4. The debt to equity (D/E) ratio has been 0.6. However, the firm will change the D/E to the target 0.9. What would be the equity beta (levered beta) under the target D/E ratio? Tax rate is 35%.a) greater than 1.55 but less than 1.65 C) greater than 1.65b) less than 1.4 d) greater than 1.44 but less than 1.55