Description of this paper

El Capitan Foods has a capital structure of 40% de...

Description

Solution


Question

El Capitan Foods has a capital structure of 40% debt and 60% equity, its tax rate is 35%, and its beta (leveraged) is 1.25. Based on the Hamada equation, what would the firm's beta be if it used no debt, i.e., what is its unlevered beta?

 

Paper#5755 | Written in 18-Jul-2015

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