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A firm with a debt ratio of 06 and pays a corporate income

Question - A firm with a debt ratio of 0.6 and pays a corporate income tax rate of 40% has an asset beta of 1.2.

What is its equity beta? Suppose a different firm has the same equity beta.

What is its asset beta if its debt ratio is 0.5 and it pays an effective corporate income tax rate of 30%?

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Accounting Basics: A firm with a debt ratio of 06 and pays a corporate income

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Accounting Basics: A firm with a debt ratio of 06 and pays a corporate income

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