The hamada equation allows the firm

Assignment Help Financial Management

Reference no: EM132029143

1. The Hamada equation allows the firm to:

A. Solve for a company’s total risk

B.Adjust the beta of a pure- play firm for its use of debit financing

C. Estimate it’s asset beta

D.Both a and C are correct

2. In order to find the cost of equity using the firm’s cost of that the rule of thumb is to:

A. Multiply Kd by one plus the tax rate

B. Multiply Kd By one minus the tax rate

C. Add 3% to 6% to Kd

D. Multiply Kd By the firms beta

Reference no: EM132029143

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