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What will be the beta of the equity

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Problem 1: A firm's debt is riskless with a beta of zero. The equity beta is 1.0. If the market value of equity is 60% of the market value of the firm what is the beta of its assets?

Problem 2: The beta of the assets of a firm is 1.2. The firm's debt has a market value of 20 million and the market value of equity is 30 million. If the beta of the firm's debt is 0.2 what will be the beta of its equity?

Reference no: EM132885106

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