A firm has a beta 0f 1.45 and a D/E ratio of .45. Their effective tax rate is 23%. They are exploring a new debt raise and stock repurchase that would modify their capital structure significantly. Their new proposed D/E ratio would be .65. What would be their new beta?

Answer rating: 100% (QA)

To calculate the new beta of the firm we need to use the formula for lever... View the full answer