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What is the asset beta of the project

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General Electrik is a MNC with a long-term debt to equity ratio of 6.66. General Electrik prefers to issue corporate bonds at a post-tax cost of 5.84%, and a cost of common equity capital of 21.48%. Suppose that the marginal tax rate is 15%. The MNC is interested in pursuing an offshore project. The debt capacity of the offshore project is 64.6% and the required return on equity is 19.15% stemming from a levered beta of 1.204.

What is the asset beta of the project?

Reference no: EM133118615

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