How much of biogen risk can be attributed to business risk

Reference no: EM132207384

Question - Biogen, a biotechnology firm had a beta of 1.70 in 1995. It had no debt outstanding at the end of that year. Estimate the cost of equity for Biogen, if the treasury bond rate is 6.4%. What effect will an increase in long-term bond rates to 7.5% have on Biogen's cost of equity? How much of Biogen's risk can be attributed to business risk?

Reference no: EM132207384

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