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Calculate the asset beta

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Question - Papaya Inc. is considering a new project in the fruit distribution business. It has a DIE ratio of 2.5, a marginal tax rate of 30%, and its debt currently yields 12%. Passion fruit Inc, is a publicly traded firm that operates in the same business, has a DIE ratio of 1.5, a marginal tax rate of 40%, and an equity beta of 0.9. If the risk free rate is 6% and the expected return on the market portfolio is 15%, calculate the asset beta, the project beta and the WACC required to evaluate the project.

Reference no: EM133116803

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