A firm currently has 70 million of debt and 30 million of


A firm currently has $70 million of debt and $30 million of equity outstanding. The firms cost of equity is currently 16.5%. What will the beta of the firm be if it changes its capital structure to 100% equity? The risk premium of the market is 7.5%, the risk-free rate is 1.5% and the tax rate is 28%.

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Financial Management: A firm currently has 70 million of debt and 30 million of
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