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bryan519688
01.08.2020 •
Business
If a firm has a levered beta of .9 and a debt to equity ratio of 1, what is the unlevered beta assuming a tax rate of 30%? (Round to the nearest hundredth)
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Ответ:
Unlevered beta = 0.53
Explanation:
Beta is a measure of systematic risk. Systematic risk is further divided into business and financial.
Business risk and financial risk. Business risk is that associated with the nature of the business operations that causes variability in the operating income of the business.
This is measured by the unlevered beta where the company has no debt finance.
Financial risk, on the other hand, is associated with use of debt finance . A company that uses a form of debt would face such risk . The systematic risk of such business would be measured using the levered beta.
The formula below shows the relationship:
βa = βe × Ve/ (Ve + Vd(1-T) )
βa -Unlevered beta
βe - Levered beta
Ve- Equity weight
Vd- Debt weight
T- Tax rate
DATA
βe- 0.9
βa- ?
Ve- 1
Vd- 1
T- 0.3
βa = 0.9 × 1/(1 + 1×(1-0.3)=0.529
βa - 0.53
Unlevered beta = 0.53
Ответ:
300 radials
Explanation:
Divide projected sales by total number of seasons
That is,
Projected sales=1200
Seasons =4
Therefore,
1200 / 4 = 300
radials planned to be sold each season next year equals 300