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Assume that the beta of the underlying assets is 2 how does

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Assume that a firm will always have enough money to pay off its bonds, so the beta of its bonds is 0. (The rate of return on the bonds is independent of the rate of return on the stock market.) Assume that the beta of the underlying assets is 2. How does the beta of the equity change if the firm changes its capital structure from all equity to half-debt and half-equity?

Reference no: EM13567690

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