Question 11 (1 point) Consider a company subject to a corporate tax rate of 0.2. If...

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Answer 1

Answer #1

We need to solve the following equation to arrive at the levered beta:

Bunlevered = Plevered (1 + (1 - tax rate)) x Boe

0.80 = Blevered (1 + (1 -0.20) x 0.30

0.80 = 1 Blevered 1.80 x 0.30

Blevered = 0.432

Answer 2

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