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What are the assumptions of interest tax shield

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In Marriott Corporation: The cost of capital case study, to determine asset betas for each division, we need to unlever betas from the firms in the same industry. a) what are the assumptions of interest tax shield respectively for Hamada equation and portfolio equation? Accordingly when should we use Hamada equation and when to use portfolio equation? Show the calculation of equity beta for each division when we use Hamada and Portfolio equation. Explain the difference of the results.

Reference no: EM131295538

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