Calculate its required return at this level of debt

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Reference no: EM131974349

The risk free rate is 5%, the expected market return is 11%

A firm has Total invested capital of $5,000.

If the firm had no debt its beta would be 1.0

It has $500 in debt and its tax rate is 40%

1. Use the firms levered Beta to calculate its required return at this level of debt.

17.63%

11.4%

7.62%

9.3%

2. In writing, an "orphan" is:

a paragraph's opening line alone at the end of a page

a paragraph's closing line alone at the top of a page

a justified line ending

a series of short paragraphs

3. Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 9.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.)

8.12%

7.88%

7.96%

8.04%

8.20%

Reference no: EM131974349

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