If Train plc (from lecture example 4) now has a debt:equity ratio of 1:10 & Thirt...
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If Train plc (from lecture example 4) now has a debt:equity ratio of 1:10 & Thirté plc is a listed hotel company with a debt:equity ratio of 1:1 and a beta value of 1.5. The market premium for risk is 8% and the risk-free rate is 4%. Tax is 30%. Required (a) (b) Calculate the asset beta of Thirté (assume debt has a beta of zero). Can Train use this to calculate its Ke? If Train plc (from lecture example 4) now has a debt:equity ratio of 1:10 & Thirté plc is a listed hotel company with a debt:equity ratio of 1:1 and a beta value of 1.5. The market premium for risk is 8% and the risk-free rate is 4%. Tax is 30%. Required (a) (b) Calculate the asset beta of Thirté (assume debt has a beta of zero). Can Train use this to calculate its Ke?
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