What is unlevered beta and break-even quantity

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1. Counts Accounting has a beta of 1.45. The tax rate is 35%, and Counts is financed with 60% debt. What is Court's unlevered beta? Round your answer to two decimal places.

2. Shapland Inc. has fixed operating costs of $750,000 and variable costs of $50 per unit. If it sells the product for $75 per unit, what is the break-even quantity?

3. According to the Miller Modigliani Prop I, the value of the levered firm:

(A) is greater than the value of the unlevered firm by the amount of the debt tax shield.

(B) is lower than the value of the unlevered firm by the amount of the debt tax shield.

(c) is equal to the amount of the debt tax shield.

(D) is equal to the value of the unlevered firm in the world with taxes.

(E) A and D are true.

Reference no: EM131342609

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